European Supervisory Authority Proposes Ban on Multi-Issuance Stablecoins

20.09.2025

At the end of September, the European Systemic Risk Board (ESRB) recommended banning the “multi-issuance” model of stablecoins — tokens issued simultaneously in the European Union and in other jurisdictions. According to the ESRB, such schemes create the risk of “arbitrage” between regions and could lead to liquidity crises during periods of instability. The main danger highlighted by the authority is that investors, seeking to quickly redeem assets, may concentrate redemption requests within the EU, overloading reserves located in these jurisdictions, while reserve funds outside the EU may be inaccessible or less liquid. In the ESRB’s view, this threatens the region’s financial stability. The proposal has already gained support within the Eurosystem. If adopted at the legislative level, it could fundamentally change the operating model of tokens that are issued outside the EU but considered interchangeable with their European counterparts. This could particularly affect U.S. issuers such as Circle and Paxos, which use multi-issuance to serve clients both inside and outside the EU. Although the recommendation is not yet legally binding, it increases regulatory pressure on stablecoins under the MiCA framework and may set a precedent for future restrictions by EU regulators.