Overview

• The ECB president warned that fungible tokens jointly issued inside and outside the bloc could channel redemptions into the EU during stress.
• MiCAR requires immediate, cost‑free redemption at par, making the EU the likely venue for investors seeking the strongest protections.
• Lagarde cautioned that reserves held within the EU could be inadequate if redemptions concentrate there during a run.
• She urged EU legislation to bar such structures unless foreign jurisdictions meet robust equivalence tests with safeguards on asset transfers between entities.
• An outside expert compared the risk to allowing a foreign bank’s depositors to redeem through an EU subsidiary, shifting group‑wide solvency and liquidity exposure onto EU supervisors.