New York and European Union regulators have joined forces to regulate Stablecoins

The European Banking Authority and the New York State Department of Financial Services (NYDFS) have signed a memorandum of understanding to police cross-border stability coin activities.

The EBA announced on Tuesday that the agreement is part of activities under the Regulation on Crypto-Assets (MiCA) and establishes principles and procedures to exchange information and coordinate stable coin regulatory activities, market trends and risks between New York and the European Union.

The NYDFS said the agreement will increase oversight of entities involved in Statcoin activities, identify market trends and risks, and enhance the integrity of the stablecoin market.

Banks and major financial institutions in the US and Europe have experimented with using stablecoins for payments, inspired by laws governing tokens in the US and EU. According to Defillama, the global stablecoin market grew to more than $319 billion on Wednesday.

Source: European Bank Authority

Some of the information shared by the two watchdogs includes the number of stablecoins released, the total amount of circulation, the number of holdings, external and internal audit results, and the regulatory status of certain products and services.

The MOU also provides a framework for the two regulators to cooperate with each other and coordinate efforts in times of crisis or emergency. However, regulated entities only monitor stable coin-related activities, not all activities that a company may engage in.

Related: ‘Stablecoins' are an obsolete term from the early years of crypto: A16z

US President Donald Trump signed the stablecoin regulations in July, with the European Union's crypto-asset framework coming into force at the end of 2024. US dollar-backed stablecoins currently hold the lion's share of the sector, with Tether's USDT and Circle's USDC the two largest by market capitalization.

Jimmy Zhou, co-founder of digital product protocol Axis, told Cointelegraph in January that the global stablecoin market has increased significantly after a rapid expansion.

Shue added that a cautious macroeconomic environment, coupled with competitive Treasury yields, has dampened appetite for rapid stable coin expansion.

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