The two authorities said that the emergence of so-called “stablecoins” has brought additional fuel to the debate opened by the growing number and forms of cryptoassets in the financial landscape.

While it is clear that cryptoassets bring about opportunities to improve the existing payment landscape, they have unique financial, monetary and technical features which set them apart from the currencies and payment instruments issued by financial institutions and central banks and therefore carry material risks of various nature (including legal, financial, operational and compliance risk with money laundering and terrorist financing, consumer and investor protection) which must be addressed appropriately. From that perspective, stablecoins of potential large size and reach may pose additional challenges of system-wide importance, to competition policy, financial and monetary stability.

Considering the high degree of integration of the financial sector in Europe, leading a reflection and foreseeing a possible action at the level of the European Union on this matter is definitely appropriate. The European Union will have to coordinate its intervention with the decisions and recommendations made at the international level (G20, G7, Financial Stability Board, Bank for International Settlements, International Organization of Securities Commissions (IOSCO), Financial Action Task Force…).

The authorities said that it will be vital to:

• minimize regulatory arbitrage, which requires that all jurisdictions across the world have a common regulatory approach targeting the mitigation of identified risks, and
• define the conditions for cooperation and coordination between regulators.

The main features of the BdF and the ACPR's response can be summarised as follows. The two authorities:

• consider there is a need for a proper classification of cryptoassets, including stablecoins and global stablecoins, in order to provide the European legal framework with a clear legal qualification;
• favour, at the European level, the set-up of a dedicated regulatory regime solely composed of adequate mandatory requirements, whatever the function and systemic feature of the cryptoassets concerned be, by contrast to an approach that would only impose minimal mandatory requirements and give an optional visa for a large number of services;
• reiterate the importance for cryptoassets to respect the CPMI-IOSCO Principles for Financial Market Infrastructures, especially the recommendation to use central bank money as settlement asset for interbank exchanges. However, the BdF, as a central bank missioned to preserve financial stability, utterly opposes any suggestion to experiment the settlement of listed securities with commercial bank money on a blockchain.