The EU Parliament’s Committee on Economic and Monetary Affairs (ECON) has published a document entitled “digital assets – challenges for the competitiveness and integrity of the European Union’s financial system.” The report and resolution have not yet been adopted by the ECON Committee but include only one specific action point: it called for the European Commission to propose legislation to clarify the treatment of multi jurisdiction stablecoins. This is explored in more detail later.
What is most notable is the tone of the short report. For a paper that includes the word “competitiveness” in the title, it’s hard to grasp how it can be viewed as constructive or forward looking. While it briefly mentions the innovation potential of DLT and tokenization, it immediately juxtaposes this with potential risks. For most other topics, it mainly emphasizes the risks without any caveats, leaving the overall impression of a prudential regulator’s outlook, unbalanced by any recognition of opportunity or competitive dynamics. This stance is reinforced by several references to third party reports that emphasize the financial stability risks of stablecoins, with limited counterbalancing of potential benefits. These include an ECB financial stability review and the BIS Annual Economic Report of June 2025, which framed stablecoins primarily through a systemic risk lens.
The ECON report covers a wide range of topics, including the DLT Pilot Regime for tokenization, the digital euro, CASP supervision and AML, with few recommendations. The report also raises AML concerns, calling for ‘a better balance between privacy and transparency in “know your customer” standards and the monitoring of payments’, language that critics would argue tilts toward greater surveillance of payment transactions rather than genuine balance. One of the few specific suggestions was a call on the European Banking Authority (EBA), ESMA, AMLA and other supervisors to improve the supervisory dialogue relating to significant multi-function groups (MFGs).
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