Bank of France Seeks Stricter Regulations on Stablecoins

The European Union is facing growing pressure to regulate stablecoins, particularly those tied to the US dollar. According to the Bank of France, a significant majority of stablecoins are backed by the dollar, with Tether's USDT dominating the market.

As a result, the Bank of France is calling for stricter regulations on MiCA (Markets in Crypto-Assets) rules, which currently do not adequately address systemic risks associated with foreign stablecoins. The proposal aims to limit the use of non-European stablecoins for critical transactions and impose reserve requirements in euros to reduce dependence on the dollar.

The Bank of France also recommends enhanced monitoring of use cases, particularly for large payments. However, critics argue that these measures could compromise data security and hinder innovation in the crypto sector.