European Regulator Sets Standards for Stablecoin Issuers

The European Banking Authority (EBA) has taken a significant step in regulating the cryptocurrency market by introducing technical standards designed to address potential conflicts of interest between stablecoin issuers and users. These standards, known as Regulatory Technical Standards (RTS), have been developed in the context of the European Union's Markets in Crypto-Assets Regulation (MiCA).

EBA emphasizes that issuers of stablecoins, which are digital tokens linked to the value of real assets, are required to provide potential investors with comprehensive information to objectively assess the likelihood of conflicts of interest arising between issuers and holders of stablecoins.

This comprehensive information should include a justification for the fair value of stablecoins, the disclosure of investment objectives, reward mechanisms, and particular attention to resolving conflicts of interest related to the reserves of the underlying asset or its market value.

It is worth noting that the European Banking Authority had previously recommended that Eurozone central banks block operations involving stablecoins if they pose a threat to the country's monetary policy. These new technical standards aim to establish a clear regulatory framework for the issuance and distribution of stablecoins, bringing greater transparency and accountability to the cryptocurrency market.