Company
Date Published
Author
Patrick Hansen
Word count
699
Language
English
Hacker News points
None

Summary

The emergence of global stablecoins has led regulators to address their potential impact on financial stability, with the EU being the first major jurisdiction to enact a regulatory framework for significant stablecoins under the Markets in Crypto-Asset Regulation (MiCA), passed in June 2023. MiCA's approach involves transferring supervisory responsibility to the European Banking Authority (EBA) and imposing additional prudential measures on stablecoins that exceed a certain adoption threshold, distinguishing it from other frameworks such as the Basel Committee on Banking Supervision (BCBS) for globally systemically important banks (G-SIBs). However, the criteria used by MiCA to determine systemic importance, such as its €5 billion market capitalization threshold, appear misaligned with the BCBS model, which considers much larger entities like Standard Chartered with assets valued at £682 billion. This discrepancy raises questions about MiCA's ability to adequately capture systemic risk, suggesting that its dual-purpose regime may need revision to better align with the financial stability concerns addressed by other international frameworks.