1. As the Council and the Commission outlined in its joint statement on 5 December 2019 no asset-backed crypto-assets (so called “Stablecoins”) arrangement should undermine financial stability, safety and efficiency of payment systems, fair competition and the existing financial and monetary order as well as monetary sovereignty in the European Union. Therefore, all options for handling asset-backed crypto-assets should be put on the table and no global asset-backed crypto-asset arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.
2. We look forward to the regulatory Proposal for Crypto-Assets announced by the Commission for the third quarter of 2020 and fully endorse the Commission's intentions to provide a precise and stable regulatory framework for asset-backed crypto-assets and to prohibit, where appropriate, those that do not meet all the prerequisites. It is of great importance that the objectives of the Proposal of Crypto-Assets are carefully aligned with the objectives of the Retail Payment Strategy to strengthen Europe’s influence and consolidating its economic autonomy in the field of payments.
3. In implementing the joint statement, we firmly believe that the regulatory framework for asset-backed crypto-assets in the EU should serve two crucial priorities: on the one hand preserve our monetary sovereignty and address the risks to monetary policy, and on the other hand protect EU consumers. To that end, the EU legislation should be built around the following general principles, appropriately applied to different types of asset-backed crypto-assets:
- Each unit of asset-backed crypto-asset created shall be pledged at a ratio of 1:1 with fiat currency.
- The assets eligible for the reserve shall be limited to deposits, deposited in a credit institution approved by the European Union, or for a fraction to highly liquid assets, subject to appropriate safeguards to be put in place.
- The assets eligible for the reserve shall be denominated in Euro or a currency of a member state of the EU, be held separately from other reserves and be nonconvertible in order to avoid exchange rate risk.
- For asset-backed crypto-assets that are intended to be used widely for payment purposes, users shall have a direct claim on the reserve and the issuer so that the user can redeem, at any moment and at par value, the asset-backed crypto-asset into legal tender.
- All entities operating as part of an asset-backed crypto-asset scheme in the EU shall be registered in the EU before starting any activity.
4. Moreover, EU legislation should adequately deal with specific issues that asset-backed crypto-assets may give rise to in terms of AML/ CFT and fair competition. All types of service providers in an asset-backed crypto-assets arrangement operating within the EU must meet the requirements of the GDPR.