Overview
- The ECB warns that larger stablecoin use could pull retail deposits from euro‑area banks, leaving lenders with more volatile funding and weaker lending capacity.
- With total stablecoin value now above $280 billion, the report says a loss of confidence could force rapid reserve liquidations and disrupt U.S. Treasury market functioning.
- The market is highly concentrated, with Tether and Circle controlling most supply and ranking among the biggest holders of short‑term Treasury bills.
- EU authorities flag multi‑issuance structures as a vulnerability that could leave EU‑regulated issuers short of reserves during combined EU and non‑EU redemptions.
- Regulators including the ESRB are pressing for tighter safeguards and possible limits on multi‑issuance, while industry figures such as Coinbase argue full‑reserve tokens reduce systemic risk.