Conference Agenda

Stablecoins are designed to maintain a stable value through redeemability at par and the holding ofnexternal reserves, yet their cross-border issuance increasingly exposes regulatory and financial stability vulnerabilities.

This article examines the risks arising from multi-issuer stablecoin arrangements,

whereby a single, fungible stablecoin is issued by multiple legally distinct entities across different jurisdictions and regulatory regimes. Focusing on the European Union’s Markets in Crypto-Assets Regulation (MiCAR), the analysis shows how such structures—currently employed by major issuers such as Circle and Paxos—facilitate regulatory arbitrage, amplify liquidity and redemption risks, and undermine the effectiveness of EU prudential supervision.

The article highlights how the fungibility of tokens issued under divergent regimes may concentrate redemption pressures on EU issuers, strain reserve adequacy, and create contagion risks for the EU banking sector. Legal and operational frictions, including the potential ring-fencing of reserves held outside the Union, further exacerbate these vulnerabilities, particularly under stressed market conditions. While MiCAR equips competent authorities with certain supervisory tools, data limitations and uncertainties surrounding the classification of ‘significant’ issuers constrain their effective use.

The article argues that MiCAR inadequately addresses the systemic implications of cross-border multiissuer stablecoins and proposes targeted reforms. These include a centralised supervisory regime for participating EU issuers under the European Banking Authority, complemented by a stringent equivalence framework for third-country partners which would limit multi-issuance to jurisdictions with comparable regulatory standards. The article concludes that enhanced cross-border supervisory

cooperation and coordinated crisis management frameworks are essential to ensure the resilience of stablecoin markets and to safeguard financial stability within the Union.

This research evaluates the systemic risk amplification of stablecoins and assesses the mitigating effects of the US GENIUS Act and the UK Bank of England mandate. Using an Agent-Based Model of 4,400 commercial banks and a Systemic Stablecoin Issuer, we simulate liquidity and solvency stress to analyze crisis contagion. Findings reveal a regulatory trilemma balancing stablecoin safety, banking liquidity, and sovereign bond stability. The integrationist US framework retains reserves in commercial banks, permitting bidirectional contagion and wholesale deposit flight during crises. Conversely, the isolationist UK mandate utilizes central bank reserves, severing banking contagion but concentrating liquidity stress in sovereign bond markets. Our results show that regulatory choices dictate where systemic stress manifests, demonstrating that fully isolated cash buffers are essential to prevent stablecoin-driven feedback loops from destabilizing the core banking sector.

This paper studies how monetary policy announcements and asso-

ciated surprises shape the volatility surface of G10 currency options,

with particular emphasis on risk reversals across moneyness and maturity,

which capture the cost of insuring against tail exchange rate movements.

We document that unexpected and hawkish policy announcements are

associated with a pronounced shift toward risk-off behavior, as investors

increase demand for protection against downside risk in foreign currencies

relative to the U.S. dollar.

To rationalize these patterns, we develop a simple model of supply

and demand in risk-reversal markets. When dealer balance sheets are

unconstrained, intermediaries absorb hedging demand by supplying option

insurance. When balance-sheet constraints tighten, dealers reduce their

risk-bearing capacity, amplifying price pressure in skew-sensitive option

contracts.

Local projection evidence supports the model’s predictions and shows

that monetary policy shocks interact with intermediary constraints to

shape the pricing of tail risk in currency option markets.

This paper investigates the implications of the rapid expansion of crypto assets and stablecoins for the international monetary system and the global roles of major currencies. Specifically, it examines how regulatory and policy regimes governing crypto assets and stablecoins shape the international position of the U.S. dollar relative to competing currencies. From a methodological perspective, the paper applies a range of econometric techniques to analyze both short-run dynamics and long-run relationships between stablecoins and exchange rates vis-à-vis the U.S. dollar. Cross-market connectedness is quantified using the Diebold–Yilmaz vector autoregression (VAR)–based framework and its frequency-domain extension proposed by Baruník and Křehlík (2018), which enables a decomposition of common shocks into transitory and persistent components. Finally, the paper develops early-warning indicators to detect structural changes in the interactions between digital asset markets and foreign exchange markets.