A major European Union financial watchdog has recommended banning stablecoins issued by multiple entities, a move that could significantly affect major players in the region's cryptocurrency sector, Bloomberg reported on Tuesday.
The European Systemic Risk Board (ESRB) approved a non-binding recommendation last week. The proposal specifically targets multi-issuer stablecoins, particularly those issued jointly within the EU and other jurisdictions.
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If lawmakers approve it, this policy could pressure authorities to restrict the operations of companies such as Circle and Paxos.
This initiative follows recent calls by European Central Bank President Christine Lagarde for stricter regulation of cryptocurrencies, highlighting concerns about stablecoins from non-EU entities.