Global Regulations on Stablecoins: What You Need to Know
Date: 2023-11-21 Author: Dima Zakharov Categories: IN WORLD
Stablecoins, such as USDT, USDC, and TUSD, have become pivotal in addressing the high volatility of traditional cryptocurrencies. Despite their popularity, a significant hurdle remains: the lack of clear regulatory policies globally. In this article, we delve into how stablecoins are currently regulated worldwide, focusing on prominent nations.
European Union (EU)
The EU has been actively tightening oversight on stablecoins for several years. In 2020, authorities urged digital asset issuers to undergo registration procedures for consumer protection. In May of this year, the European Council unanimously approved the Markets in Crypto-Assets (MiCA) regulations, imposing additional capital requirements and centralized supervision on stablecoin issuers.
However, on November 8, 2023, the EU's banking supervisory body introduced new requirements for stablecoin regulation. Public hearings are scheduled for January 30, 2024, following three months of public discussions. If approved, these regulations will be effective from June 2024. According to the proposal, issuers of fiat-backed stablecoins must possess sufficient funds to fully repay investors.
The European Banking Authority (EBA) has proposed minimum capital and liquidity requirements for stablecoin and other digitized token issuers. The aim is to ensure the ability to promptly repay investors at face value, even during market volatility. These regulations mark the world's first comprehensive set of rules for cryptocurrency and stablecoin markets.
