ECB Publishes New Electronic Payments Framework Featuring Stablecoins

The European Central Bank (ECB) has published a new framework that assesses the security and efficiency of electronic payments, including electronic wallets and crypto-asset-related services bordering on stablecoins. In a press release published by the ECB, the new framework includes an assessment methodology and creates the basis for which related service providers operating within the region will be regulated.

Amongst the companies the Eurosystem will be overseeing using the new payments framework include those whose businesses centers around enabling or supporting the use of payment cards, credit transfers, direct debits, e-money transfers, and digital payment tokens, including electronic wallets. Crypto firms, particularly those dealing with stablecoin transactions will also be bound by the new framework.

“The retail payments ecosystem is evolving fast owing to innovation and technological change. This calls for a forward-looking approach in overseeing digital payment solutions,” said ECB Executive Board member Fabio Panetta. “The PISA framework will include digital payment tokens such as stablecoins, alongside traditional payment instruments and schemes we have gained experience in over the years. Internationally coordinated action will also have to be stepped up to cope with the challenges posed by global digital payment solutions and stablecoins.”

With the growing use of various digital assets including stablecoins for crucial monetary transactions, regulators around the world have grown uncomfortable with digital tokens. While the G7 once posited that stablecoins are a risk to global financial stability, the ECB’s inclusion of the new asset transfer method shows proactivity in the trend that is overshadowing the payments ecosystem. 

This is a dramatic shift from the ECB as it once maintained an unfavorable stance to Meta’s Diem stablecoin project.

Preparations for the Digital Euro

The ECB’s tilt towards the current payment trend that birthed stablecoins is also extending to the development of the digital Euro, the Bloc’s Central Bank Digital Currency. Back in October, the ECB revealed its Digital Euro Advisory Committee members as it looks to bolster its efforts in developing the CBDC for the region.

The attempt by the ECB to keep stablecoin issuers in check alongside other industry stakeholders is notably not being antagonized by big names in the industry. As reported earlier by TheCoinRise, Circle CEO, Jeremy Allaire is supportive of the call to regulate stablecoin issuers like traditional banks, a move that embodied a similar sentiment to welcome regulations across the board.

Ahead of the Digital Euro launch, the ECB said that entities that will be bound by the new framework will have a grace period of 12 months to make the necessary adjustments.