365Crypto
A New Fear Inside Europe’s Central Bank
Europe’s top bankers now worry that dollar-backed stablecoins are growing so fast they could rattle the entire financial system.
Dutch central bank governor Olaf Sleijpen said these tokens look stable until they don’t, and then trouble hits fast.
He explained that a sudden loss of trust could push issuers to dump assets at high speed, stressing markets that already feel tight.
He joked that “stablecoin” sometimes sounds like a marketing slogan rather than a promise.
When Tokens Move, Policy Might Move Too
Sleijpen said a big enough shock could force the European Central Bank to rethink monetary policy.
He noted that it’s unclear whether the ECB would need to raise or cut rates because the impact depends on how messy the sell-off becomes.
He warned that rapid reserve liquidation could hurt liquidity, shift asset prices and squeeze credit conditions.
This could twist inflation in either direction, depending on how deep the panic goes.
A Market Growing Like a Rocket
Stablecoin market value jumped almost 50% this year, hitting about $310 billion.
Tether grew from $127 billion to $183 billion, while USDC nearly doubled from $37 billion to $74 billion.
The U.S. Treasury even predicted stablecoins could reach a $2 trillion market cap by 2028.
Sleijpen said that if these tokens keep booming, their swings could start shaping Europe’s economic outlook.
Europe’s Worries Over Dollar Dominance
Other European officials also fear the rise of dollar-denominated tokens across the eurozone.
ECB board member Piero Cipollone said a digital euro could help preserve Europe’s monetary control.
Italy’s finance minister argued stablecoins threaten financial stability more than trade tariffs.
Economist Jean Tirole warned governments might face huge bailout pressure if major stablecoins suddenly collapse.
Footing:
Stablecoin: crypto token pegged to a stable asset. Liquidity: ability to buy or sell without large price changes. Monetary policy: central bank tools that manage inflation and economic activity.
