Instabilities can also arise if many holders want to exchange their stablecoins back into "real" money due to a loss of confidence. In this case, a scenario similar to a typical bank run might occur. This risk might further increase as a result of strong interdependencies between stablecoins and other crypto assets in Decentralised Finance (DeFi) markets.
In this context, Europe is working at full speed to finalise the Markets in Crypto Assets Regulation – MiCA. With MiCA, the European Union is creating a single European regulatory framework for crypto assets. MiCa will protect European customers investing in crypto assets and prevent misuse of crypto assets, while being innovation-friendly and maintaining the attractiveness and competitiveness of the European market.