ECB Flags Broad Financial Perils From Stablecoins, Including Tether, USDC
ECB Reaffirms Alert That Stablecoins Might Generate Broad Financial Perils
The EU’s monetary authority asserts stablecoins extract worth from eurozone lenders and could present a hazard to worldwide financial soundness.
By Olivier Acuna|Edited by Sheldon RebackUpdated Nov 24, 2025, 1:23 p.m. Published Nov 24, 2025, 11:19 a.m.
What to know:
- The European Central Bank declared that stablecoins might unsettle the monetary framework by pulling retail funds away from eurozone banking institutions.
- The total worth of all stablecoins has gone beyond $280 billion, which constitutes approximately 8% of the entire cryptocurrency domain.
- The ECB indicated that a sudden sell-off of stablecoins could prompt a rush to liquidate reserve possessions, impacting U.S. Treasury markets and potentially initiating a financial meltdown.
The European Central Bank (ECB) on Monday shared a study cautioning that stablecoins introduced a worldwide financial soundness danger considering that they could siphon off significant retail deposits from eurozone banks.
"Considerable expansion in stablecoins could initiate retail deposit leakages, lessening a crucial source of financing for banking firms and leaving them with a more fluctuating financing situation overall," the ECB stated.
Stablecoins’ combined market value has grown to more than $280 billion, spurred by heightened investor attention and worldwide regulatory advancement, and currently makes up about 8% of the entire cryptocurrency sphere. The major actors, Tether, the organization behind USDT, and Circle Internet (CRCL), provider of USDC, rank among the most substantial holders of U.S. Treasury notes.
“A surge of withdrawals from these stablecoins might spark an abrupt liquidation of their reserve assets, which could influence the operation of U.S. Treasury markets and give rise to a wider financial calamity, according to the research.
The ECB’s viewpoint echoes worries lately voiced by one of their board associates, Dutch National Bank (DNB) Governor Olaf Sleijpen, an individual involved in the bank’s decision-making.
The investigation isn’t devoid of dispute. In October, Coinbase Chief Policy Officer Faryar Shirzad, penned that "full-reserve backing positions stablecoins as more secure than banking". He additionally stated that stablecoin broader use bolsters financial soundness.
