On November 24, the European Central Bank released a report warning that stablecoins threaten global financial stability. The authors believe their rising popularity places serious pressure on traditional credit institutions across the eurozone.
According to the report, a significant increase in stablecoin volumes triggers retail deposit outflows, forcing banks to shift toward more volatile funding schemes. The ECB views this dynamic as a factor that reduces the resilience of the entire banking system.
Crypto industry representatives disagree with the European officials’ conclusions. In October, Coinbase Chief Policy Officer Faryar Shirzad described stablecoins as a more reliable instrument compared to banking. He argued that full reserve backing makes digital assets safer, while their widespread adoption only strengthens overall financial stability.
At the time of publication, the combined market capitalization of stablecoins exceeded $313 B — this sector now accounts for about 8% of the entire cryptocurrency market. Increased investor interest and progress in global regulation drive this growth. The largest market participants, such as Tether and USDC issuer Circle Internet (CRCL), rank among the significant holders of U.S. Treasury bills.
Read also:
- Nine European Banks Launch Euro Stablecoin Under MiCA
- Stablecoins in 2025: Everyday Use, Top Risks & How to Choose Safely
This post is for informational purposes only and does not constitute advertising or investment advice. Please do your own research before making any decisions.