Overview

• The European Systemic Risk Board warned on October 2 that “third country multi-issuer” stablecoin models carry built-in vulnerabilities and endorsed a recommendation to prohibit them.
• Regulators say identical tokens issued inside and outside the EU can trigger redemptions through EU entities while key reserves sit offshore, potentially forcing ECB intervention during stress.
• The recommendation is not legally binding, but the ESRB said a detailed report will follow in the coming weeks, increasing pressure for policy action.
• Stablecoins now exceed $300 billion in market value, with Tether’s USDT holding more than 58% share and euro-pegged tokens representing about 0.15% of the total.
• Global authorities have flagged similar risks, as the U.S. enacted the GENIUS Act in July and Hong Kong’s rules took effect August 1, while the Bank of England and BIS warn on reserve management and monetary sovereignty.