ECB warns dollar stablecoins could trigger major macro shocks in Europe

Speaking in an interview with the Financial Times on Monday morning, the European Central Bank (ECB)’s Dutch central bank governor, Olaf Sleijpen, said the rise of dollar-linked stablecoins is enough to shake Europe’s money system if anything goes wrong.

He explained that the ECB may soon need to deal with these assets as possible sources of macroeconomic shocks, not just as another crypto issue.

Sleijpen said the worry comes from what happens when these coins lose their peg. He said that a shake-up could push issuers to dump the assets they hold to back the tokens. He said this kind of fast selling could hit markets hard.

He said this risk matters because the ECB might then need to “rethink monetary policy,” though he said it is not clear if that would mean raising or cutting rates. He pointed to the size of the sector today. He said CoinGecko numbers show stablecoins up almost 50% this year, with the whole market now around $310 billion.

Tracking rising crypto pressure

Sleijpen pointed out that Tether’s USDt (USDT) went from $127 billion in November 2024 to $183 billion this year, a 44% surge, while USDC doubled from $37 billion to $74 billion. Data from CoinGecko backs his claims.

Sleijpen also mentions how the US Treasury expects stable tokens will grow even faster in the coming five to ten years. Trump’s Treasury had indeed said in April that stablecoins could hit $2 trillion by 2028 if the market keeps moving at this pace.

He said that if dollar-pegged stablecoins keep expanding, price swings in the sector could become big enough to influence Europe’s wider economic outlook.

He said that includes the risk of changes to inflation and general financial stability. He said it could force the ECB to react in real time instead of treating crypto as something far away from policy.

He is not alone. In April, Piero Cipollone from the ECB Executive Board wrote that the safest way to protect Europe’s monetary control is to launch a CBDC.

He said a digital euro would help stop foreign stablecoins from becoming a common way to pay in the region. He warned that too much use of dollar-backed tokens could put the euro at risk.

Italy’s economy minister Giancarlo Giorgetti said something similar around that time. He said US dollar stablecoins are a bigger danger to Europe’s financial system than trade tariffs. He said the size of the market means any trouble could spill into banks and markets fast.

Sleijpen then pushed the point further, adding that the biggest threat is the way large issuers could act under pressure. He mentioned that if major players sell reserves in bulk, the hit could spread into liquidity, asset prices, and even inflation. Sleijpen said the danger grows with size.

And in September, Nobel Prize winner Jean Tirole warned that governments may face rescue demands worth billions if top stablecoins fall apart.

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