Bank of Italy calls for tighter rules on global multi-issuance stablecoins

The Bank of Italy has issued a stark warning about multi-issuance stablecoins, calling for stricter regulatory frameworks to protect European Union financial stability. The central bank's vice director emphasized that these cryptocurrency instruments should only operate in jurisdictions with equivalent regulatory oversight, highlighting growing concerns about digital asset risks in traditional finance.

This regulatory push comes as stablecoins increasingly bridge traditional banking and the DeFi ecosystem, with major tokens like USDT and USDC facilitating billions in daily cryptocurrency transactions. The Italian banking authority's stance reflects broader European skepticism toward unregulated digital currencies, potentially impacting Bitcoin and broader blockchain adoption across the eurozone.

Multi-issuance stablecoins, which can be created across multiple platforms and jurisdictions, present unique challenges for financial regulators monitoring cross-border cryptocurrency flows. The Bank of Italy's recommendations could influence upcoming EU cryptocurrency legislation, potentially restricting how major stablecoin issuers operate within European markets.

This development signals continued regulatory scrutiny of the cryptocurrency sector, as central banks worldwide grapple with balancing innovation in blockchain technology while maintaining financial system stability and consumer protection.