Lagarde Pushes for Global Parity in Stablecoin Regulation to Prevent Crisis

ECB President Christine Lagarde is urging a preemptive crackdown on regulatory arbitrage in the stablecoin market.

Highlighting a critical vulnerability, she warned that the EU’s own robust MiCA framework could inadvertently become a source of risk when dealing with jointly issued non-EU stablecoins.

Lagarde’s solution is to demand “robust equivalence regimes” from the source country, mirroring MiCA’s requirements for 1:1 backing and fee-free redemption at par value.

This preemptive measure is designed to prevent a scenario where a loss of confidence triggers a cross-border bank run, with investors flooding into the EU to redeem coins that are not fully backed by local reserves, thereby threatening European financial stability.