Lagarde Sounds Alarm on Foreign Stablecoins

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ECB chief Christine Lagarde is drawing a hard line on non-EU stablecoins. In a recent speech, she highlighted a major loophole: what happens when a non-EU issuer teams up with an EU-based entity? Her answer: unless the foreign jurisdiction’s rules are as “robust” as Europe’s MiCA, they shouldn’t be allowed to operate.

Her core concern is a “run” on the stablecoin. Investors, she argues, would all rush to redeem their coins under the EU’s superior protections, which forbid redemption fees.

The problem? The reserves held within the EU might not be enough to cover a massive, coordinated withdrawal, potentially causing a collapse.