AsianFin -- European Central Bank President Christine Lagarde on Wednesday called on European Union legislators to impose stringent safeguards and robust equivalence frameworks on foreign stablecoin issuers to reduce the risk of reserve runs within the EU.

The EU already enforces one of the world’s strictest regulatory regimes on crypto assets, mandating that stablecoins—digital currencies pegged to an official currency—be fully backed by reserves.

Lagarde emphasized that companies issuing stablecoins, whether within the EU or abroad, should meet the same high standards.

“European legislation should ensure that such schemes cannot operate in the EU unless supported by robust equivalence regimes in other jurisdictions and safeguards relating to the transfer of assets between the EU and non-EU entities,” she said at a regulatory conference.