ECB Renewing Warning on Stablecoins: There Are Global Risks

Warning from the European Central Bank on Stablecoins

The European Central Bank (ECB) reiterated its warnings that stablecoins could pose a threat to the financial system. The Bank stated that stablecoins could withdraw retail deposits from Eurozone banks, potentially disrupting financial stability.

Significant Increase in Market Size

The market value of stablecoins has exceeded $280 billion, representing approximately %8 of the total cryptocurrency market. This situation could further amplify the impact of stablecoins on the financial system.

Possible Crisis Scenarios

The ECB noted that a flight from stablecoins could lead to the emergency sale of reserve assets. This could negatively affect U.S. Treasury markets and potentially trigger a financial crisis.