US Fed warns against stablecoin bailouts as EU tightens rules on digital euro

Former Federal Reserve governor Kevin Warsh told Congress that the Fed will not provide bailouts for crypto assets, emphasizing that the focus should be on interest‑rate policy rather than rescue mechanisms. He highlighted the risks surrounding stablecoins, noting past incidents such as the USDC de‑peg during the Silicon Valley Bank collapse.

In the United States, the 2025 GENIUS‑Act promotes dollar‑linked stablecoins, allows non‑bank issuers, and bars a consumer‑facing digital dollar. Meanwhile, the European Union’s MiCA regulation restricts private euro‑stablecoins, requiring most reserves to be held in bank deposits and prohibiting interest payments on digital euro tokens. The contrasting approaches shape a broader debate over whether money should be issued by central banks as a CBDC or by private firms as stablecoins, with implications for financial stability and the future of the monetary system.