France flags gaps in MiCA, pushes for stricter stablecoin rules

In a major regulatory push, the Bank of France has called for reinforcing the European Union’s crypto regulatory framework, specifically around stablecoin payments, as questions grow over whether existing rules are sufficient to manage the risks posed by these digital assets.

Denis Beau, First Deputy Governor of the Bank of France, addressed the issue at the EUROFI High Level Seminar earlier this year. His remarks, subsequently published on the Bank for International Settlements website, confirmed that the institution has been advocating for changes to the EU’s Markets in Crypto-Assets regulation, commonly known as MiCA, with a focus on how the framework handles payment stablecoins, particularly those pegged to non-euro currencies.

However, Beau indicated that MiCA’s current provisions only partially address the risks that could arise from the widespread adoption of stablecoins for payments, especially those issued by entities outside the eurozone.

Among the concerns outlined, Beau also pointed to the potential for large-scale stablecoin use to interfere with monetary policy transmission across the euro area. Further, he also flagged risks tied to operational failures among payment-focused stablecoin issuers and noted that consumer protections against de-pegging events may need to be reconsidered.

Meanwhile, Dollar-pegged stablecoins account for approximately 98% of total stablecoin market share globally, a dynamic that European policymakers have increasingly viewed as a structural challenge. Beau suggested that supporting tokenized central bank money and well-regulated private alternatives could form part of the response, alongside stronger rules. To stress his point, he referenced tokenization projects including Pontes and Appia as examples of progress on settlement infrastructure, while noting that regulatory measures alone may not fully resolve the issue.

Beau also drew a distinction between stablecoin issuers with banking backgrounds or electronic money licenses and those without, describing the latter as carrying comparatively greater financial risk.

Echoing similar views, Bank of Italy Governor Fabio Panetta had also noted in the past that MiCA has had limited impact on the adoption of compliant stablecoins within the EU, similarly pointing to the digital euro as a potential longer-term solution.