The ECB called for a clear regulation of stablecoins prior to their widespread use

The European Central Bank insists on the need to develop a clear regulatory framework for regulating global stablecoins before approving their use.

The ECB believes that this class of digitalassets has not only a number of advantages, such as speed and simplicity, but also certain risks associated with their cost, stability, and system failures.

Because end users will view a stablecoin as a deposit equivalent based on its promise of “stable” value. cost andThe ability to freely convert back into fiat may be threatened if the coin loses its asset peg or its support level changes.

The organization also notes that globalDigital assets may be very different from each other and may not comply with some of the existing legal structures. Therefore, they may fall under several regulatory frameworks, or perhaps none of them.

Based on the complexity of stablecoin regulation,The European Central Bank has called for clear rules and a comprehensive approach to the issue. According to the organization, this will allow them to take advantage of their potential benefits without compromising financial stability.

In addition, at the beginning of the year, an ECB representative suggested that banks develop a cheaper payment solution to counter private stablecoins such as Facebook's Libra.

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