The recent boom in stablecoins The ECB said this requires close monitoring, even if risks to financial stability appear limited at the moment.European Central Bank).
“Stablecoins are growing rapidly and may be adopted in new use cases, which could expose financial stability to risks in the future,” the ECB said. This Monday (24) in preview of the Financial Stability Report, which will be published on Wednesday.
One risk identified by the report is that if widely adopted, households could replace a portion of their bank deposits with stablecoins.– Reducing an important source of bank financing “It leaves them with more volatile financing overall,” the ECB said.
These warnings come at a time when banks and other financial institutions are expanding their activities with stablecoins, following the approval of the “Genius Act” in the United States, which created a new regulatory framework for these tokens. The combined market capitalization of all stablecoins has reached an all-time high, and now exceeds $280 billion, according to the European Central Bank.
The comments echo those of central banks and other regulators, as global authorities discuss revamping rules on banks’ crypto-asset holdings, which are set to come into effect next year.
The ECB once again highlighted “the risks arising from cross-border regulatory arbitrage,” adding that “it is crucial that regulatory frameworks are further harmonized at the global level.”
Regarding stablecoins jointly issued in the EU and third countries (so-called multiple issuance schemes) and potential risks for European issuers, the ECB once again called for “additional safeguards, imposing preconditions that must be met before allowing access to the EU market.” The European Systemic Risk Board is pushing for a ban on multi-issuance stablecoins in the region.