CBFL Joint Seminar: “Foreign Stablecoins in Domestic Payment Streams – Regulatory Approaches in Comparative Perspective” by Benedikt Bartylla & “Syndicated Loans and Competition Law” by Christian Bergqvist

This double seminar dealt with two topics: the regulation of stablecoins and the competition law implications for syndicated loams. The two speakers, Mr Benedict Bartylla and Associate Professor Christian Bergqvist, were on research visits to CBFL at the time.

Mr Bartylla discussed the regulatory approaches to foreign stablecoins in domestic payment streams from a comparative perspective. Mr. Bartylla introduced three main types of token-based systems involving token issuers, token holders, and third parties, which serve as the basis for defining access to foreign stablecoins in domestic payment streams. He compared the regulatory approaches of four major jurisdictions- the EU, the US, the UK, and Singapore- in terms of direct transactions, intermediated transactions, P2P payments, and redemptions of foreign-issued stablecoins.

Mr. Bartylla noted that there is a divergence in stablecoin regulations across these four jurisdictions. Specifically, the EU and the US generally prohibit trading in foreign-issued stablecoins, but certain regulatory exemptions are available under the MiCAR and the GENIUS Act, while the UK and Singapore do not restrict trading in foreign-issued stablecoins, which may however be subject to payment-related regulations. He further elaborated on possible motivations behind these different regulatory approaches. The regulatory focus of the EU and the US is to protect domestic customers and ensure a level playing field for service providers, while managing access to foreign stablecoins through exemptions. By comparison, the UK and Singapore allow entry for dominant foreign players, but offer other relevant regulations as an alternative to prevent domestic stablecoin issuers from harming customers outside their jurisdiction

Associate Professor Christian Bergqvist’s topic was syndicated loans and competition law. Professor Bergqvist started with the concept of syndicated loan and the major actors involved, including the borrower, lenders, and the arrangers. He highlighted the main advantages such as providing banks with better risk management, allowing for larger loans beyond the willingness or ability of a single bank, and reducing information asymmetry between borrowers and lenders.

Despite these advantages, Professor Bergqvist discussed how syndicated loans could raise competition law risks, since the process involves close collaboration between market players who are probably competitors. He provided an analysis of four theories of harm that may arise in the process of forming a syndicate and granting a syndicated loan in relation to collusion among advisors or lenders, unifying prices and terms through information exchange, tying of ancillary services, and the use of standard documents. Some of these theories of harm relate to pricing (commissions and interest rates) or the syndicated loan process (forming a consortium to bid for managed lead arrangers), while others arise from the risk of market manipulation. Professor Bergqvist’s discussion considered in particular the risk of infringing Article 101 of the Treaty on the Functioning of the European Union by object or effect. He concluded that ordinarily syndicated loans would not raise concerns from a competition law perspective but there was aways a risk that the practice would attract the attention of national competition authorities.