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European Commission says MiCA rules already tackle stablecoin risks

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The European Commission said on Friday that the EU’s landmark crypto regulation, MiCA, already provides a robust framework to handle risks linked to stablecoins, pushing back against the European Central Bank’s call for stricter safeguards.

Stablecoins—digital tokens tied to fiat currencies like the U.S. dollar or euro—have grown rapidly in recent years, prompting debate over how they should be regulated. While the United States has moved to promote their use, the ECB has warned that some models could threaten financial stability.

At the center of the dispute is whether multinational stablecoin issuers can treat tokens created inside and outside the EU as interchangeable under MiCA’s “multi-issuance” model. In a letter to EU Commissioner Maria Luis Albuquerque this week, six crypto trade groups, including Circle, urged Brussels to clarify that such structures are allowed.

A Commission spokesperson told Reuters that MiCA already provides “a proportionate framework for addressing risks” and said guidance confirming how multi-issuance operates will be published “as soon as possible.”

The ECB’s Systemic Risk Board, chaired by Christine Lagarde, argues that cross-border token issuance could lead to runs on EU reserves if holders outside the bloc attempt to redeem with EU entities during market stress. Stablecoin issuers, however, maintain that adequate reserve management can prevent such instability.

Analysts at J.P. Morgan said this week that 99% of all stablecoins are pegged to the U.S. dollar, noting that the sector’s global expansion could further boost demand for the greenback.

ECB Chooses AI Startup Feedzai to Combat Fraud in Upcoming Digital Euro

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The European Central Bank (ECB) has selected Portuguese artificial intelligence firm Feedzai to develop fraud-prevention systems for its planned digital euro, a project intended to strengthen Europe’s financial independence from U.S. payment networks and dollar-backed stablecoins.

The contract—valued at up to €237.3 million ($278.7 million)—was announced Thursday as part of a broader package of agreements advancing the digital euro initiative. Under the four-year deal, which could extend up to 15 years, Feedzai and its subcontractor PwC will create an AI-powered fraud scoring system capable of analyzing transactions for suspicious patterns based on user behavior, history, and interactions.

This technology will assist payment service providers in determining whether to approve or flag digital euro transactions—essentially, transfers between central bank–backed electronic wallets.

The ECB also awarded four additional contracts, ranging from €27.6 million to €220.7 million, to firms including Capgemini, which will support different technological and operational aspects of the digital currency ecosystem. Under these framework agreements, the ECB will only pay contractors once project implementation begins.

While the central bank continues to await legislative approval for the digital euro, officials describe it as a strategic response to Visa and Mastercard’s dominance in European payments and the rising influence of U.S.-linked stablecoins promoted under former President Donald Trump. If approved by mid-2026, the digital euro could be launched as early as 2029.

Feedzai, headquartered in Portugal, already monitors more than $8 trillion in global transactions annually, serving clients such as Novobanco and Wio Bank in Abu Dhabi. On the same day as the ECB announcement, Feedzai disclosed an additional $75 million in funding from Lince Capital, Iberis Capital, and Explorer Investments, signaling strong investor confidence in its role within Europe’s financial digitization push.

The partnership marks a major milestone in the ECB’s effort to balance innovation with financial security, ensuring that the future digital euro remains as safe as cash—but smarter.

Bulgaria’s GERB Party Leads Election, Prepares for Coalition Talks

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ulgaria’s center-right GERB party emerged as the frontrunner in Sunday’s parliamentary election, securing 26.4% of votes according to an Alpha Research exit poll. To establish a functioning government, GERB, led by Boyko Borissov, will need a coalition partner. Reformist party We Continue the Change (PP) followed with 14.9%, and the ultra-nationalist Revival party took third place with 12.9%.

This election marks Bulgaria’s seventh in just four years, triggered by a breakdown in coalition negotiations after the June 9 election. Borissov, thanking supporters, pledged to form a new government but ruled out working with Revival. GERB is projected to take 74 seats in the 240-seat parliament, while PP and Revival would secure 42 and 36 seats, respectively.

Former Prime Minister and PP member Nikolai Denkov emphasized the need for GERB to present a viable government proposal, highlighting the demand for stable governance to facilitate EU funding and Bulgaria’s bid to join the eurozone, slated for January 2025 but previously delayed due to inflation issues.

Amid ongoing political instability, some voters expressed concern over Bulgaria’s future. “What was expected, happened more or less … I think we are going to have more elections,” commented 60-year-old Vassil Vasilev.

Preliminary results from the state election commission are anticipated by 11 p.m. local time (2100 GMT).