EBA and NYDFS coordinate cross-border stablecoin oversight

The European Banking Authority and the New York State Department of Financial Services signed a memorandum of understanding on Tuesday to coordinate cross‑border supervision and share information on stablecoin activities under the EU’s Markets in Crypto‑Assets (MiCA) framework.

The agreement sets principles and procedures for exchanging data and coordinating oversight of stablecoin issuance, market trends and risks between supervisors in New York and the European Union. The EBA described the pact as part of its responsibilities under MiCA, noting it aims to strengthen cooperation on supervised entities involved in stablecoin activity.

Under the memorandum, regulators will share information including which stablecoins are issued, total volume in circulation, number of holders, results of external and internal audits, and the regulatory status of specific products and services.

The text establishes a framework for mutual assistance and coordination during crises that affect stablecoin markets. The arrangement will focus on activities that are subject to regulatory supervision and will not cover all tokens or every activity a company may conduct.

NYDFS described the agreement as one that will “enhance the supervision of entities engaged in stablecoin activities, identify market trends and risks, and promote the integrity of the stablecoin market.”

U.S. dollar‑denominated stablecoins make up the bulk of sector activity, with Tether’s USDT and Circle’s USDC holding the largest market capitalizations. Banks and major financial institutions in the United States and Europe have tested stablecoins for payments and settlement. A law on stablecoins was approved in the United States in July, and MiCA came into effect in the EU at the end of 2024.

Market tracker data showed the global stablecoin market exceeded $319 billion. Some industry participants report issuance has slowed after rapid expansion. Jimmy Xue, co‑founder of quantitative yield protocol Axis, noted in January that new regulation, tighter liquidity and higher yields in traditional markets have reduced incentives for rapid stablecoin issuance.

The memorandum specifies coordination mechanisms for timely information exchange, joint analysis of market developments and cooperative action in stress scenarios to help supervisors monitor cross‑border flows and risks as stablecoin use grows.