Bank of Italy Warns Multi-Issuance Stablecoins Pose EU Financial Risks

Highlights:

• The Bank of Italy warns that cross-border tokens need strict limits and strong crisis protocols.
• Multi-issuance stablecoins may create legal and stability risks if issuers operate outside the EU.
• Stablecoins pegged to one fiat currency are seen as safer for payments, urging the EU to adopt unified standards.

A senior Bank of Italy official has warned that stablecoins issued in several countries could present serious risks to the European Union’s financial system. Chiara Scotti, vice director of the Bank of Italy, delivered her remarks at the Economics of Payments Conference in Rome. She noted that while these tokens might increase liquidity, they also introduce vulnerabilities that could threaten financial stability.

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🚨 BREAKING: Bank of Italy calls for tighter rules on global multi-issuance stablecoins. Vice director warns of risks to EU financial stability, advocates for restrictions. #BankOfItaly #Stablecoins

— CryptoAlert (@SatoshiWatch) September 19, 2025

Multi-issuance stablecoins are digital assets released under a single brand but managed by issuers located in different jurisdictions. This model is accessible and offers more liquidity. Nevertheless, it poses great risks in cases where at least one of the issuers is not within the EU. Scotti elaborated that this structure complicates the oversight and brings into question the legal accountability beyond the national borders.

She described four key areas of risk: legal, operational, liquidity, and stability. She cautioned that redemption demands made by non-EU holders could strain the situation in the union. In addition, operational issues may arise if non-EU subsidiaries shift assets to cover reserve shortages. That movement could create stress within the financial system and weaken trust in the token.

Scotti also pointed to concerns about the EU’s Markets in Crypto-Assets Regulation, known as MiCA. She said the multi-issuance model could undermine MiCA’s effectiveness by limiting the framework’s ability to enforce uniform standards across all jurisdictions. She emphasized that this issue requires urgent attention before such tokens grow in use.

Multi-Issuance Stablecoins Face Strict Oversight Challenges Under MiCA Rules

Asset-referenced tokens and e-money tokens are the two types of stablecoins under the MiCA framework. Issuers are required to get permission in the EU and adhere to stringent regulations that include reserves, governance, and disclosures. These regulations prohibit algorithmic stablecoins.

Scotti presented several recommendations to strengthen oversight. She urged that stablecoins be issued only in jurisdictions with equivalent standards. She added that redemption must always be ensured at par value, regardless of circumstances. Moreover, she stressed the importance of cross-border crisis protocols that allow supervisors to respond quickly to problems.

Her comments came as EU institutions debate how to handle the multi-issuance model. The European Commission believes existing regulations may allow flexibility for cross-border interchangeability. However, the European Central Bank has issued warnings that such models could threaten stability unless supported by clearer legislation.

🚨 BREAKING: ECB’s Lagarde warns of liquidity risks from non EU stablecoins. Calls for strong rules to ensure foreign issuers can meet EU redemption demands in a crisis. #Crypto #Stablecoins #ECB pic.twitter.com/U1vJymbMVP

— Pushpendra Singh Digital (@PushpendraTech) September 4, 2025

Italy has consistently raised concerns about stablecoins. Earlier this year, Italian regulators joined counterparts in France and Austria in calling for crypto oversight to move to the European Securities and Markets Authority in Paris. In May, Bank of Italy Governor Fabio Panetta suggested that a euro-based central bank digital currency would be more effective in addressing risks than relying solely on new restrictions.

These remarks build on earlier warnings from Italian officials. Reports released in April highlighted the potential dangers if dollar-pegged stablecoins gained systemic importance.

Pressure for Unified Standards

Scotti also highlighted the importance of international cooperation. She explained that supervisory authorities should be able to liaise across jurisdictions and continuously observe reserves. She claimed that in the absence of cohesive control, risks may rapidly cross borders and destabilize the finances.

Scotti admitted the advantages of stablecoins despite her warnings. She stated that they are able to save money in transaction costs, enhance efficiency, and even give 24-hour access. Nevertheless, she contended that payments should be made only with tokens pegged to one fiat currency.

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