New York and EU Regulators Formalize Transatlantic Stablecoin Supervisory Cooperation

The New York Department of Financial Services (NYDFS) and the European Banking Authority (EBA) have signed a memorandum of understanding aimed at strengthening supervisory cooperation and information sharing related to stablecoin oversight.

The 22-page agreement establishes procedures for exchanging supervisory and confidential information concerning entities regulated by the two authorities. According to the NYDFS, the arrangement is intended to enhance oversight, identify emerging risks and market trends, and support market integrity as stablecoin activity continues to expand across jurisdictions.

The agreement reflects the increasingly cross-border nature of stablecoin markets, where issuers, reserves, users, and payment flows often span multiple regulatory regimes. As stablecoins gain a larger role in global financial infrastructure, regulators are seeking mechanisms to coordinate oversight and respond more effectively to operational, financial, or market-related disruptions.

Agreement Establishes Cross-Border Information Sharing

Under the memorandum, both authorities will share supervisory information relevant to entities under their respective oversight and cooperate on matters involving regulatory monitoring and enforcement.

The agreement also outlines procedures for responding to emergency situations, including cases involving serious operational or financial difficulties at supervised firms. In such circumstances, the NYDFS and EBA have committed to notifying each other promptly and coordinating regulatory responses within their jurisdictions.

The framework further provides a basis for cooperation regarding civil and criminal investigations when relevant information is requested by either authority.

Stablecoin Growth Increases Regulatory Coordination Needs

The agreement comes as stablecoins continue to play a growing role in digital asset markets and international payments. The sector's market capitalization has surpassed $314 billion, increasing regulatory attention on issuer resilience, reserve management, and systemic risk.

Recent market events have underscored these concerns. In 2023, Circle's USDC temporarily lost its dollar peg after the company disclosed exposure to the collapse of Silicon Valley Bank, highlighting how disruptions within the traditional financial system can affect digital asset markets.

The incident remains one of the most prominent examples of how stress events can create risks for stablecoin holders and reinforce the need for supervisory coordination across jurisdictions.

European Officials Continue to Raise Stablecoin Concerns

The agreement also follows renewed warnings from European policymakers regarding the growing influence of dollar-denominated stablecoins.

Last week, European Central Bank Executive Board member Isabel Schnabel cautioned that stablecoins remain vulnerable to run risks and could weaken Europe's monetary sovereignty if their adoption continues to expand. She noted that the overwhelming majority of stablecoins currently in circulation remain linked to the U.S. dollar, while alternative currencies account for only a limited share of the market.

Such concerns have become increasingly prominent as regulators in both the United States and Europe develop dedicated frameworks for stablecoin issuers and payment token providers.

International Oversight Efforts Continue to Expand

While the memorandum is not legally binding, it establishes a formal channel for cooperation between two of the most influential regulators overseeing digital asset activities in their respective jurisdictions.

NYDFS Acting Superintendent Kaitlin Asrow described international coordination as essential for the digital asset sector, emphasizing the need for regulators to work together as digital asset markets become increasingly interconnected.

The agreement adds to a broader trend of cross-border regulatory cooperation as authorities seek to oversee stablecoin activity that increasingly operates beyond the boundaries of individual national markets.