On December 5, 2019, the European Council and Commission released a Joint Statement on “Stablecoins”.
The Statement highlighted the economic benefits and opportunities of technological innovations vis a versa challenges and risks posed by Stablecoins. The Joint Statement reiterated that global ‘Stablecoin’ projects and arrangements should not be operated until all related risks and concerns are adequately addressed. For proper assessment against the applicable rules, entities intending to issue ‘Stablecoins’, or carry out other activities involving ‘Stablecoins’ in the EU are required to promptly provide full and adequate information on how they intend to manage risk concerns and operate their business.
The Statement called for global concerted effort of the European Central Bank, National and European Supervisory Authorities in addressing the regulatory challenges and risks associated with ‘Stablecoins’. The need to ensure legal clarity about the status of ‘Stablecoin’ arrangements is also emphasised.
Joint statement by the European Council and the Commission on “stablecoins”
Firms that intend to issue ‘Stablecoins’, or carry out other activities involving ‘Stablecoins’ in the EU should provide full and adequate information urgently to allow for a proper assessment against the applicable existing rules.
The Council and the Commission state that ‘Global Stablecoin’ arrangements cannot commence operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.
Firms are advised to review the Joint Statement and ensure that Senior Management / Executive Teams and Board Members are aware, such that any plans to launch a ‘Stablecoin’ take account of the transparency requirements and risk assessment.
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Please Note: This publication is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Readers should take legal advice before applying the information contained in this publication to specific issues or transactions.
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