ECB warns stablecoins could drain eurozone bank deposits, threaten stability
The European Central Bank on Monday flagged growing risks from stablecoins, saying they could draw significant retail deposits away from euro-area banks. The ECB warned that a destabilizing run on a major stablecoin — or sudden redemptions — could amplify liquidity stress for banks and spill over into broader markets, raising concerns for financial stability beyond the region.
That warning matters because bank deposits are a core funding source for lending and payment systems; rapid outflows could force banks to sell assets or tighten credit. The ECB’s statement is likely to accelerate scrutiny from regulators and push policymakers to consider tighter rules or safeguards for stablecoin issuers, custodians and market infrastructure. Investors, banks and payment providers will be watching for follow-up guidance and supervisory actions that could reshape the crypto-payment landscape in the eurozone.