Bank of Italy Advocates Stricter Global Stablecoin Regulations to Safeguard EU Financial Stability

The Bank of Italy has issued a strong call for enhanced regulatory oversight of multi-issuance stablecoins, citing significant risks to the European Union’s financial stability. In a recent address, the institution’s vice director emphasized that these digital assets, which are backed by multiple issuers across various jurisdictions, require tighter controls to prevent systemic vulnerabilities. The central bank argues that stablecoin operations should be confined to regulatory environments deemed equivalent to EU standards, ensuring consistent supervision and risk management practices. This stance aligns with broader efforts by European regulators to create a secure framework for digital finance under the Markets in Crypto-Assets (MiCA) regulation. The warning highlights growing concerns over cross-border stablecoin activities that could evade stringent oversight, potentially leading to liquidity crises or contagion effects in traditional financial systems. The Bank of Italy’s position reinforces the need for international cooperation in crypto asset regulation, urging global peers to adopt harmonized approaches to mitigate emerging threats.