EU Proposes New Liquidity Rules for Stablecoin Issuers to Ensure Quick Redeemability
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The European Banking Authority has proposed new liquidity guidelines for stablecoin issuers, requiring full redeemability of stablecoins backed by fiat currency.
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The guidelines include liquidity stress testing to assess if stablecoins have enough liquid buffers and can be quickly redeemed even in crises.
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The rules aim to ensure stablecoin issuers meet the same standards as banks and avoid unfair advantages.
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The proposal is currently in a 3-month public consultation phase until January 2024.
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If approved, the rules will come into effect starting June 2024 and authorities can strengthen liquidity requirements based on stress test results.