Overview
- Stablecoins now exceed $280 billion in market value, with USDT and USDC controlling roughly 80–90% and ranking among the largest holders of short‑term U.S. Treasuries.
- The ECB cautions that a redemption run could force fire sales of reserve assets and impair the functioning of U.S. Treasury markets.
- Significant adoption could pull retail deposits from euro‑area banks, leaving lenders more reliant on volatile wholesale funding and potentially constraining credit.
- EU authorities flag vulnerabilities from fungible tokens issued both inside and outside the bloc, warning that redemption mismatches could amplify run risk for EU‑supervised entities.
- Europe’s euro‑denominated stablecoins remain small at about €395 million under MiCA rules that prohibit interest payments, while U.S. liberalization under the GENIUS Act has accelerated dollar‑token growth.