Key facts
- The Bank for International Settlements (BIS) warned that the rapid expansion of stablecoins risks fragmenting the global monetary system and weakening sovereign monetary control.
- BIS suggested accelerating the development of tokenized central bank and commercial bank money as alternatives.
- Binance experienced over $400 million in net outflows in the week starting June 22.
- Binance withdrew its Markets in Crypto-Assets Regulation (MiCA) license application in Greece.
- EU lawmakers are considering whether to regulate crypto lending, borrowing, staking, NFTs, and DeFi.
The Bank for International Settlements (BIS) issued a stark warning regarding the rapid expansion of stablecoins, stating that it risks fragmenting the global monetary system and undermining sovereign monetary control. In its Annual Economic Report, the institution highlighted structural vulnerabilities in stablecoin reserve asset management and suggested that a significant shift from commercial bank deposits to private digital tokens could reduce bank funding and constrain credit to the real economy. The BIS recommended accelerating the development of tokenized central bank and commercial bank money as safer alternatives.
In parallel, cryptocurrency exchange Binance reported over $400 million in net outflows for the week beginning June 22. This occurred as the exchange announced its withdrawal of its Markets in Crypto-Assets Regulation (MiCA) license application in Greece. The outflows accelerated on Wednesday following the announcement of the withdrawal from the Greek regulator. These outflows come in the final week before the European Union's MiCA transition deadline on July 1, after which Binance will restrict onboarding and some services for affected EU users.
Meanwhile, EU lawmakers are considering further regulatory measures. The European Parliament's economic affairs committee has urged the European Commission to assess whether additional crypto activities, including crypto lending and borrowing, staking, non-fungible tokens (NFTs), and decentralized finance (DeFi), should be brought under regulation. The committee's report, drafted by Johan Van Overtveldt, also calls for promoting tokenization across financial services and encouraging euro-denominated stablecoins. The report is set for a plenary vote in the European Parliament on July 7.