Stablecoins Could Force ECB to Shift Rates: Official
The European Central Bank (ECB) is sounding the alarm on stablecoins, warning that their rapid growth could disrupt monetary policy and financial stability in the Eurozone. Olaf Sleijpen, governor of the Dutch central bank, argues that the surge in U.S. Treasury-backed stablecoins—now valued at $300 billion—poses systemic risks. A sudden loss of confidence could trigger mass sell-offs of underlying assets, spilling over into European markets.
Banks with stablecoin exposure may become vulnerable to contagion, forcing the ECB to reconsider interest rate policy. While the central bank remains undecided on whether to hike or cut rates in response, the liquidity crunch scenario underscores how crypto innovations are increasingly intersecting with traditional finance.
