ECB Rejects Easing Euro Stablecoin Rules, Warns of Bank Funding Risks on May 22

According to Reuters, on May 22, ECB President Christine Lagarde and other central bankers rejected proposals to ease liquidity requirements for euro stablecoin issuers, arguing that doing so would undermine European banks' funding capacity. The proposals, presented by Brussels think tank Bruegel at an informal EU finance ministers and central bank governors meeting in Nicosia, Cyprus, would have opened access to ECB liquidity for stablecoin firms. Lagarde and other officials pushed back, stating that allowing stablecoin issuers to draw deposits from European banks at scale would raise banks' funding costs and curb their ability to extend credit. Several central bankers also opposed designating the ECB as a backstop for stablecoin issuers, a role traditionally reserved for supervised banks.
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GateUser-7e09095evip
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