{"id":127678,"date":"2025-04-22T10:16:16","date_gmt":"2025-04-22T10:16:16","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=127678"},"modified":"2025-04-22T10:16:16","modified_gmt":"2025-04-22T10:16:16","slug":"ecb-flags-risk-of-financial-contagion-from-us-crypto-push","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=127678","title":{"rendered":"ECB flags risk of financial contagion from US crypto push"},"content":{"rendered":"<p>Source: Cointelegraph.com NewsThe European Central Bank (ECB) raised an alarm over potential fallout from aggressive US support for the crypto industry, warning that a surge in dollar-backed stablecoins could destabilize Europe\u2019s financial system.<br \/>\nAccording to a policy paper seen by Politico, the ECB has asked for a revision of the Markets in Crypto-Assets Regulation (MiCA) regulatory framework for cryptocurrencies just months after it came into effect.<br \/>\nThe concern is that US reforms backed by President Donald Trump could flood European markets with dollar-denominated stablecoins.<br \/>\nThe ECB fears this could trigger a flight of European capital into US assets, undermining EU financial sovereignty and exposing banks to liquidity risks.<br \/>\nECB and European Commission Clash Over MiCA Rules<br \/>\nWhile the ECB calls for tighter controls, the European Commission dismissed the warnings as exaggerated, per the report.<br \/>\nThe report, citing two diplomats and one EU official, said that the existing MiCA framework is robust enough to manage stablecoin risks despite potential US policies like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS), two bills aimed at expanding America\u2019s crypto footprint.<br \/>\n\u201cThe Commission was quite clear that they had different views on this topic,\u201d and \u201cnot very many (countries) supported the idea that we should now jump the gun and start making quick changes in (the rules) based on this alone,\u201d one of the diplomats reportedly told Politico.<br \/>\nThe stablecoin sector now commands a valuation of $234 billion, according to data from CoinMarketCap.<br \/>\nThe ECB warned that European issuers could face redemption pressures from EU and foreign holders without stricter limits, potentially sparking a financial \u201crun\u201d and harming exposed institutions.<br \/>\n\u201cThe worry is warranted,\u201d Mikko Ohtamaa, co-founder and CEO at Trading Strategy, said in a post on X. \u201cHowever, the EU had the first mover advantage with the regulation and they screwed it up.\u201d<br \/>\nOhtamaa said no EU stablecoin is globally competitive due to MiCA\u2019s restrictive rules, which are influenced by bank and legacy finance lobbying.<br \/>\nSource: Mikko OhtamaaRelated:\u00a0US regulator,s FDIC and CFTC, ease crypto restrictions for banks, derivatives<br \/>\nTether Remains a Major Critic of MiCA<br \/>\n\u200bTether, the issuer of the world\u2019s largest stablecoin, USDT, has long been a critic of the EU\u2019s MiCA regulation.<br \/>\nLast year, CEO Paolo Ardoino argued that MiCA\u2019s requirements, particularly the mandate for stablecoin issuers to hold at least 60% of reserves in EU bank accounts, could introduce systemic risks to both stablecoins and the broader banking system.<br \/>\nDue to noncompliance with MiCA, Tether\u2019s USDt (USDT) has faced delistings from major European exchanges, including Coinbase, Crypto.com and Kraken.<br \/>\nMagazine:\u00a0Altcoin season to hit in Q2? Mantra\u2019s plan to win trust: Hodler\u2019s Digest<a href=\"https:\/\/cointelegraph.com\/news\/ecb-warns-us-crypto-push-stablecoin-risk-europe?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_partner_inbound\" target=\"_blank\" class=\"feedzy-rss-link-icon\" rel=\"noopener\">Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Source: Cointelegraph.com NewsThe European Central Bank (ECB) raised an alarm over potential fallout from aggressive US support for the crypto industry, warning that a surge in dollar-backed stablecoins could destabilize&hellip; <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127678"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=127678"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127678\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=127678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=127678"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=127678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}