Briefing
The Governor of the Bank of France publicly demanded the European Commission strengthen the Markets in Crypto-Assets (MiCA) regulation by banning the “multiple issuance” model for stablecoins and transferring supervisory authority to the European Securities and Markets Authority (ESMA). This action directly challenges the current MiCA framework, which permits the same issuer to offer a stablecoin both inside and outside the EU without a full reserve obligation in both jurisdictions, a loophole the Bank of France argues creates systemic financial dependency on foreign, non-European actors. The primary consequence is the immediate political pressure on the Commission to amend the Asset-Referenced Token (ART) framework, which became applicable on June 30, 2024.
Context
Prior to this demand, the MiCA framework established a comprehensive, harmonized licensing regime for Crypto-Asset Service Providers (CASPs) and issuers of ARTs across the EU. The prevailing compliance challenge centered on the legal ambiguity surrounding “multiple issuance,” where a non-EU entity could issue a dollar-backed stablecoin globally, including in the EU, without the full collateral reserves being physically or legally ring-fenced within the EU jurisdiction. This structural allowance under MiCA created a systemic risk, compromising the ability of European authorities to seize assets and protect local holders in a crisis, which was a point of growing consensus among central banks and risk boards.
Analysis
This regulatory signal necessitates a critical review of product structuring and compliance frameworks for all stablecoin issuers, especially those with non-EU parent entities. The proposed ban on “multiple issuance” would compel foreign issuers to establish fully collateralized, jurisdictionally separate EU subsidiaries, dramatically increasing capital requirements and operational complexity. Furthermore, the transfer of supervisory authority from National Competent Authorities (NCAs) to ESMA would standardize enforcement, eliminating potential regulatory arbitrage across Member States. Regulated entities must model the financial impact of fully localized reserve requirements and prepare for a single, centralized ESMA compliance channel, fundamentally altering the existing multi-jurisdictional compliance architecture.
Parameters
- Contested Model ∞ Multiple Issuance ∞ Allows the same stablecoin company to issue tokens inside and outside the EU without full reserve backing in both jurisdictions.
- Supervisory Shift Demand ∞ ESMA Oversight ∞ The call is for the transfer of crypto supervision from National Competent Authorities (NCAs) to ESMA.
- Risk Board Position ∞ ESRB Recommendation ∞ The European Systemic Risk Board recommended outright banning the multiple issuance practice.
- Commission Counter-Position ∞ Regulatory Adequacy ∞ The European Commission confirmed existing MiCA regulations are sufficient to address stablecoin risks.
- Applicability Date ∞ June 30, 2024 ∞ The date MiCA provisions for Asset-Referenced Tokens (ARTs) became applicable.
Outlook
The immediate outlook is one of high-level policy friction between the European Commission, which defends the current MiCA text, and key central banking authorities like the Bank of France and the European Systemic Risk Board. This pressure will likely force a legislative or delegated act to address the perceived stablecoin vulnerability, potentially setting a precedent for other jurisdictions concerned about foreign stablecoin dominance. Industry participants should anticipate a forthcoming consultation period on reserve segregation and jurisdictional control, which will ultimately drive consolidation by favoring well-capitalized firms capable of establishing legally and operationally distinct EU entities.
