ECB Warns $300 Billion Stablecoin Market Could Trigger Global Financial Crisis
Dutch central bank governor Olaf Sleijpen has warned that the $300 billion stablecoin market could become systemically relevant and pose a threat to European monetary policy. Instability in this sector might trigger mass sell-offs of assets, particularly U.S. Treasuries. The stablecoin market has surged approximately 48% this year, reaching around $300 billion, partially driven by new U.S. regulations under President Trump. Euro-denominated stablecoins represent a small fraction of the market, totaling under $549 million or 0.18%, while dollar-pegged tokens dominate about 99.58% of the global stablecoin market. The European Systemic Risk Board has highlighted vulnerabilities inherent in multi-issuer stablecoin models. It also supports banning structures where issuers regulated in the EU hold reserves, but identical tokens are managed and backed abroad by non-EU partners. Such arrangements could lead to stress-driven redemptions that overwhelm European reserves and financial stability.
