Amid growing concerns over the risks posed by non-euro-backed stablecoins, the Bank of France is advocating for a revamp of the current regulatory framework governing crypto assets within the European Union. As technological advancements in the realm of digital currencies continue to evolve, the central bank emphasizes the need for more robust regulation to mitigate potential risks. With the European Union’s Markets in Crypto-Assets Regulation (MiCA) at the forefront, the conversation around tightening these parameters is gaining momentum. Additionally, recent global events have heightened the urgency to address possible regulatory gaps to safeguard financial stability.
Reports from January highlighted initiatives by European policymakers to diminish the dependency on U.S.-centric card networks and dollar-denominated stablecoins, aiming to sustain the foundational role of the European Central Bank in the monetary system. Adding to these measures, in September 2025, discussions about prohibiting multi-issuance stablecoins surfaced, underscoring the risks associated when foreign stakeholders claim assets from EU-located issuers.
Why is MiCA considered inadequate?
The Bank of France, represented by First Deputy Governor Denis Beau, posited that MiCA falls short in addressing the comprehensive spectrum of risks in the crypto-asset sector. The potential broad adoption of stablecoins from non-European entities remains a pivotal concern. Assessing these dynamics, it becomes evident that further regulatory adaptations are necessary.
What regulatory measures are proposed?
To counter identified vulnerabilities, the Bank of France suggests MiCA to curtail the use of stablecoins for daily payments, specifically when these are not backed by the euro. Additionally, there is an assertion for stricter governance over stablecoin issuance, both within and outside EU borders, to mitigate regulatory exploitation during crises. Clarifying the regulatory framework for e-money tokens (EMTs) is also emphasized to enhance compliance and understanding.
Beau argued that stablecoins issued by financial institutions linked to banking groups present a diminished counterparty risk due to their access to central bank liquidity and oversight within Europe. Non-bank entities lack this access, though potential changes might enable them to obtain it, provided they offer payment services.
“At the global level, I would like to reiterate the importance of a full, timely, consistent and global implementation of the FSB Standards on crypto-assets by all countries,” Beau stressed on the necessity for consistency in applying these standards.
Beau also highlighted, “MiCA only partially addresses the risks posed by changes in the sector, particularly in the event of widespread adoption of stablecoins issued by non-European players.”
Given the intricate realm of cryptocurrency, the Bank of France’s proactive stance outlines a need for regulatory clarity to ensure a balanced monetary environment. With statements pointing out apparent discrepancies and advocating for uniformity in regulatory actions, the emphasis is on developmental pathways that uphold economic stability. This dialogue signifies an essential step towards aligning global cryptocurrency regulations.
