TL;DR
- The European Central Bank (ECB) warns that the growing support from the United States for cryptocurrencies, especially dollar-backed stablecoins, could trigger capital outflows from Europe.
- It calls for a review of the MiCA regulatory framework just months after its implementation.
- Meanwhile, the European Commission sees these concerns as unnecessary, sparking an internal debate over the future of financial sovereignty in the region.
The European Central Bank (ECB) has expressed concern over the increasing regulatory momentum the United States is giving to the crypto sector, particularly with legislative projects like the “STABLE Act” and the “GENIUS Act”. These initiatives aim to position the U.S. as a global leader in the stablecoin market. According to the ECB, this could lead to an exodus of European capital into dollar-denominated assets, weakening the eurozone’s financial sovereignty and exposing its banking system to liquidity risks.
The warning comes just months after the implementation of the MiCA (Markets in Crypto-Assets) regulation, initially celebrated as a pioneering framework for crypto regulation across the continent. However, the ECB has now officially requested a review of key aspects of the regulation, arguing that its current restrictions may be insufficient to counter the American surge and could backfire by harming Europe’s competitiveness.
MiCA Under Fire: Division at the Heart of Europe
The European Commission, on the other hand, has responded that it sees no strong reason to revise MiCA so soon. Internal sources say several member states consider it premature to make changes without fully assessing the real impact of U.S. laws. This divergence in opinion between the ECB and the Commission reveals a lack of consensus on Europe’s approach to cryptocurrencies and raises doubts about its ability to respond to geopolitical shifts.
Currently, the global stablecoin market is valued at around $234 billion, led by giants like Tether (USDT), which has openly criticized MiCA’s requirements. The rule mandating that at least 60% of reserves be held in European banks has led to USDT being delisted from platforms such as Coinbase and Kraken in Europe, negatively affecting ecosystem liquidity.
Adapt or Fall Behind
Mikko Ohtamaa, CEO of “Trading Strategy“, was blunt:
“The ECB’s concern is valid, but Europe wasted its first-mover advantage by imposing rules that stifle innovation.”
His view echoes the sentiment of many within the industry: Europe needs regulations that protect, yes, but also foster competitiveness against powers like the U.S.
While regulators continue to debate, the market keeps evolving. The crypto wave isn’t slowing down, and Europe will have to decide whether it reacts with flexibility and foresight, or risks losing its role in the new global financial order.
