Stablecoin depeg fears push New York and EU regulators closer
New York’s financial regulator has formed a stablecoin supervision agreement with the European Banking Authority as regulators on both sides of the Atlantic tighten cooperation over digital assets.
Summary
- NYDFS and the European Banking Authority signed an agreement to share information on stablecoin supervision.
- The agreement covers market risks, consumer protection, and oversight of firms involved in stablecoin activity.
- DFS said its stablecoin framework includes reserve rules, redemption standards, transparency, and limits on rehypothecation.
The New York State Department of Financial Services said Tuesday that it signed a memorandum of understanding with the EBA to support the exchange of supervisory and confidential information linked to stablecoin activity.
NYDFS and EBA expand stablecoin oversight
Under the agreement, the two regulators plan to share information on entities involved in stablecoin operations, market risks, and supervisory concerns. The DFS said the arrangement is meant to strengthen oversight, protect consumers, and support market integrity in a sector that continues to draw attention from finance officials.
Kaitlin Asrow, acting superintendent of the DFS, said effective financial regulation depends on strong ties between regulators. She added that international cooperation remains important for digital assets because stablecoins operate across borders and involve multiple markets simultaneously.
EBA Executive Director François-Louis Michaud described the agreement as a milestone for transatlantic cooperation on stablecoin supervision. According to Michaud, the deal supports efforts to build a coordinated supervisory framework for crypto-assets and maintain high standards for cross-border activity.
DFS said it has supervised stablecoin issuance since 2018, covering regulated firms approved to issue stablecoins in New York. The department said its framework includes reserve requirements, redeemability standards, transparency rules, and a ban on rehypothecation.
The New York regulator has long played a central role in U.S. crypto oversight through its BitLicense regime and separate rules for digital asset firms. In the stablecoin market, its standards apply to companies under DFS supervision, including those approved to issue dollar-backed tokens in the state.
Although the memorandum is not legally binding, DFS said the agreement provides both regulators with a framework for cooperation when supervisory issues arise. The department said the MOU also supports identifying stablecoin market trends and potential risks.
CFOs still cite compliance concerns
The agreement comes as PYMNTS reported that digital assets have reached discussions among finance chiefs but have not entered daily corporate finance operations at most firms.
According to PYMNTS research, 77% of CFOs cited regulatory or compliance uncertainty as a barrier to using crypto in business payments. The same research found that 67% of CFOs gave the same answer for stablecoins.
PYMNTS also reported that 58% of CFOs said their companies have neither discussed nor considered using stablecoins. For cryptocurrencies, the figure was 70%. The research found that 13% of companies currently use stablecoins, while 5% use cryptocurrencies.
European Central Bank board member Isabel Schnabel recently warned that stablecoins remain exposed to risks and could affect Europe’s monetary sovereignty.
