The European Banking Authority (EBA) and the New York State Department of Financial Services (NYDFS) have signed a Memorandum of Understanding (MoU) to enhance cooperation, exchange of information, and coordination regarding stablecoin-related activities. This agreement represents an important step towards reinforcing transatlantic supervisory efforts and highlights a mutual commitment to ensuring that the rapidly evolving stablecoin market is regulated to the highest standards.
Stablecoins have become increasingly important in global financial markets. Under the EU’s Markets in Crypto-Assets Regulation (MiCAR), the EBA is entrusted with supervisory responsibilities for issuers of crypto-assets such as asset-referenced tokens (ARTs) and electronic money tokens (EMTs). In parallel, the NYDFS oversees virtual currency business activities in New York State, where stablecoins are classified as a form of virtual currency.
The MoU is grounded in Article 126 of MiCAR, which empowers the EBA to conclude administrative agreements with third-country authorities to facilitate cooperation and information exchange. Its overarching purpose is to ensure an effective level of supervisory cooperation between the EBA and NYDFS, particularly in cases where the activities of supervised entities may affect stablecoin holders, market participants, or financial stability in either jurisdiction.
The scope of the MoU is focused and covers only stablecoin-related activities of supervised entities or persons. Within this framework, the agreement seeks to enhance supervision, support risk assessment, promote the safety and soundness of regulated firms, and contribute to the functioning and integrity of stablecoin markets. It also aims to improve monitoring of global market developments and regulatory trends in this sector.
A key feature of the MoU is the establishment of robust mechanisms for cooperation and information sharing. Both authorities agree to provide relevant information either upon request or on their own initiative, insofar as this is legally permissible and operationally feasible. Additionally, the authorities may invite each other to participate in supervisory colleges, thereby fostering closer coordination in the oversight of cross-border entities.
The MoU outlines extensive categories of information that may be exchanged. These include authorisation decisions, the volume of stablecoins in circulation, risk analysis, internal and external audit results, and supervisory sanctions. This level of cooperation is intended to provide both authorities with a comprehensive understanding of potential risks and developments.
Overall, the MoU represents a proactive step towards building a globally coordinated supervisory framework for stablecoins, reinforcing financial stability and market integrity across jurisdictions.
Author:
Yanica Deguara Associate
yanica.deguara@inarilaw.com