Dutch Central Banker Warns Stablecoin Panic Could Disrupt ECB Policy
Dutch central bank governor Olaf Sleijpen cautioned that trouble in the stablecoin market could spill into broader financial markets if issuers are compelled to sell the assets backing their tokens. He warned such forced liquidations would raise volatility and put added pressure on market functioning, increasing the likelihood of rapid repricing across short-term funding and asset markets.
The concern matters for the ECB because abrupt asset sales and tighter money markets can complicate efforts to steer interest rates and liquidity conditions in the euro area. Sleijpen’s warning underscores growing regulatory attention: cross-border stablecoins could require stronger reserve rules and international coordination to prevent runs that would undermine monetary policy and financial stability.