Speaking at a regulatory conference on Wednesday, Lagarde warned that without “safeguards” and “robust equivalence regimes” in place, the reserves backing these digital assets could pose risks to financial stability if runs occur.
She stressed that EU legislation must not allow stablecoin schemes to function in the single market unless they are supported by strong frameworks in their home jurisdictions. In addition, she emphasized the importance of strict rules governing the transfer of assets between EU and non-EU entities to prevent loopholes.
Lagarde also underscored the global nature of the challenge, noting that regulatory gaps in one region can be exploited elsewhere. “This also highlights why international cooperation is indispensable. Without a level global playing field, risks will always seek the path of least resistance,” she said.
Her remarks come as the EU prepares to roll out its landmark Markets in Crypto-Assets (MiCA) regulation, which aims to set global standards for the oversight of cryptocurrencies and stablecoins.