Fernando Navarrete brings an unusual combination of credentials to his role steering digital euro legislation through the European Parliament. A former central banker with a free market outlook, he has made no secret of his skepticism toward a fully fledged retail CBDC, viewing it as a nice to have compared to the more pressing need for central bank money on a DLT. Yet it is precisely that combination, central banking experience alongside free market instincts, that shapes his pointed views on stablecoin regulation.
Earlier this week, White House digital asset adviser Patrick Witt took to X to criticize JP Morgan’s Jamie Dimon, arguing that stablecoins can be lightly regulated because issuers don’t lend out funds. Navarrete, speaking at the Institute of International Finance’s (IIF’s) European Summit, takes a sharply different view. Where Witt focuses on the absence of lending as the basis for light regulation, Navarrete argues that responsibility for customer funds is a key bank-like function that demands serious oversight. He describes the current level of stablecoin regulation as “a joke” if stablecoins are to be used in the mainstream.
He pointed to the mountains of legislation that banks currently face, compared to the tiny number of clauses in Europe’s MiCA regulations that govern stablecoins. Even if one views 75% of those banking rules as unnecessary, and even if stablecoins should be regulated more lightly than banks, that remaining 25% of bank regulation is still a thousand times more than the current version of MiCA. For mainstream use, that’s not enough.
He said if “90 or 99% of the use of stablecoins is just a bridge between the crypto and the fiat world, fine, you don’t need that. But as long as you have eventually stablecoins as deposits for people’s wealth, this is not a minor thing. Sorry. We cannot live with a MiCA type of regulation, of an ad hoc thing that is extremely lean.” He added, “This is just a joke.”
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
