REGULATION | France Pushes for Tighter MiCA Limits on Non-Euro Stablecoin Payments

French policymakers are calling for stricter controls on stablecoin usage under the European Union’s Markets in Crypto-Assets (MiCA) framework, particularly targeting non-Euro-pegged tokens.

Denis Beau, First Deputy Governor of the Bank of France, said the current MiCA rules may not go far enough in addressing risks tied to the growing adoption of stablecoins, especially those linked to the US dollar, which dominate the global market.

Speaking at a recent financial seminar, Beau urged EU authorities to tighten restrictions on how such stablecoins are used for payments warning they could undermine Europe’s monetary sovereignty and financial stability if widely adopted.

“It is also important to be clear about the foundations of our payment system that need to be preserved, to ensure that the deployment of tokenized finance deliver its expected efficiency benefits, without bringing additional sources of financial and monetary stability as well as strategic autonomy risks,” said Beau.

“These adverse consequences would certainly materialize if the diffusion of SC as settlement assets would lead to a “stablecoinisation” and “dollarisation” of a significant part of our payment system.”

Beau has said that, regarding the type of issuer of stablecoin, he considers that stablecoins issued directly by a bank or by an electronic money institution (EMI) belonging to a banking group present structurally lower counterparty risk than those issued by non-bank actors.

“Non-bank stablecoin issuers currently do not meet the eligibility criteria under the Eurosystem policy on access for non-bank payment service providers to central bank services and therefore cannot access central bank accounts.

However, such access could potentially be considered in the future, particularly for non-bank stablecoin issuers that also provide payment services, subject to certain conditions.”

His comments come as French lawmakers also move to increase oversight of crypto activity domestically. The country’s National Assembly recently approved a provision requiring users to report self-custodied crypto holdings above €5,000 annually as part of an anti-fraud bill.

The developments highlight a broader push in France to strengthen crypto regulation as Europe grapples with the rapid rise of dollar-backed stablecoins and their potential impact on the region’s financial system.

Stay tuned to BitKE for deeper insights into the European crypto regulatory space.

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