Overview
- The ECB’s latest Financial Stability Review says a run on major stablecoins could force fire‑sales of reserve assets and disrupt the functioning of U.S. Treasury markets.
- Tether’s USDT and Circle’s USDC dominate the sector and rank among the largest holders of short‑term Treasuries, increasing the impact of any confidence shock.
- The ECB warns that wider use of stablecoins could siphon household deposits from euro‑area banks, increasing funding volatility and weakening lending capacity.
- Cross‑border “multi‑issuance” arrangements could leave EU‑supervised issuers short of reserves during combined redemptions, with the ESRB backing tighter limits or bans on such designs.
- Regulators highlight fragmented rules as adoption accelerates under the U.S. GENIUS Act, while industry voices such as Coinbase argue full‑reserve models bolster safety.