European Central Bank President Christine Lagarde has called on regulators to address regulatory gaps relating to stablecoins issued outside the European Union.
Speaking at a conference of the European Systemic Risk Board, Lagarde emphasized that non-EU stablecoins operating with EU entities should not be allowed in the bloc without "robust equivalence regimes" in their home jurisdiction.
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These regimes must guarantee investors the right to redeem their holdings at par value and require issuers to maintain full backing for their coins.
Lagarde warned of the risk that, during a crisis, investors could rush to redeem their holdings in the EU due to its stronger MiCA framework, which could overwhelm local reserves held as backing.