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ECB Doubles Down on Warning That Stablecoins Could Pose Global Financial Risks
The EU’s central bank says stablecoins draw value from eurozone banks and could pose a risk to global financial stability.
Updated Nov 24, 2025, 1:23 p.m. Published Nov 24, 2025, 11:19 a.m.
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What to know:
- The European Central Bank said stablecoins could destabilize the financial system by drawing retail deposits away from eurozone banks.
- Stablecoins' market capitalization has surpassed $280 billion, representing about 8% of the total cryptocurrency market.
- The ECB said a run on stablecoins could lead to a fire sale of reserve assets, hitting U.S. Treasury markets and possibly triggering a financial crisis.
The European Central Bank (ECB) on Monday released a report warning that stablecoins posed a global financial stability risk because they could draw valuable retail deposits away from eurozone banks.
"Significant growth in stablecoins could cause retail deposit outflows, diminishing an important source of funding for banks and leaving them with more volatile funding overall," the ECB said.
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Stablecoins’ combined market capitalization has grown to more than $280 billion, driven by increased investor interest and global regulatory progress, and now accounts for about 8% of the total cryptocurrency market. The largest participants, Tether, the company behind USDT, and Circle Internet (CRCL), issuer of USDC, are among the biggest holders of U.S. Treasury bills.
“A run on these stablecoins could trigger a fire sale of their reserve assets, which could affect the functioning of U.S. Treasury markets and lead to a broader financial crisis, according to the report.
The ECB's stance echoes concerns expressed recently by one of their board members, Dutch National Bank (DNB) Governor Olaf Sleijpen, one of the bank's decision-making members.
The analysis isn't without controversy. In October, Coinbase Chief Policy Officer Faryar Shirzad, wrote that "full-reserve backing makes stablecoins safer than banking”. He also said stablecoin broader adoption reinforces financial stability.
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