Macroprudential Regulation refers to policies and supervisory frameworks designed to mitigate systemic risk across the entire financial system. These regulations aim to prevent broad financial instability rather than focusing solely on the soundness of individual institutions. For digital assets, this involves monitoring and addressing risks that could affect the wider economy.
Context
News often reports on central banks and international financial bodies proposing or implementing Macroprudential Regulation specifically tailored for digital asset markets. Concerns about the potential for stablecoins or other large digital asset platforms to pose systemic risks drive these discussions. The goal is to safeguard financial stability as digital assets become more interconnected with traditional finance.
The ESRB's shift to macroprudential oversight mandates immediate operational and legal separation for all multi-function crypto groups and the complete exclusion of non-MiCA stablecoins.
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