- Stablecoin risk prompts potential ECB monetary changes.
- Stablecoins pose systemic European financial risks.
- Dollar-pegged coins may cause market volatility.
The Dutch central bank governor, Olaf Sleijpen, warned on November 17, 2025, about the potential financial instability stemming from large-scale stablecoin runs in Europe.
Such instability could compel the European Central Bank to modify policies, stressing the crucial need for robust regulatory frameworks.
Olaf Sleijpen, Dutch central bank governor, has warned that stablecoin runs could force the ECB to modify monetary policy. Stablecoins pose a systemic risk in Europe due to potential liquidity shocks. As he stated, “If there is a run on stablecoins, especially those pegged to the dollar, this could create major volatility in the European financial system and force the ECB’s hand in terms of policy adjustment or direct intervention.” Financial Times Interview
Sleijpen stressed that if stablecoins pegged to the dollar experience a run, it could trigger major financial instability. The ECB might need to intervene to manage market volatility. The growing systemic footprint of stablecoins has been acknowledged as a concern by the European Central Bank.
The warning highlights potential consequences for financial markets and institutional capital. Liquidity flows from euro markets to dollar-pegged stablecoins could escalate.
A panic in the stablecoin sector could affect various cryptocurrencies, including USD-backed stablecoins like USDT and Euro stablecoins. Investors and market stakeholders remain vigilant. Market analysis platforms like TradingView provide crucial insights into these dynamics.
Historical precedents such as the 2022 Terra/UST depeg show how stablecoin issues can lead to broader market sell-offs. The necessity of preventing such occurrences has been underscored, with ESMA noting, “We need robust regulatory frameworks to manage large-scale redemption events.” ESMA Official Portal
Regulatory bodies like ESMA and ECB have echoed concerns over stablecoin impact, emphasizing the need for regulatory frameworks. Such developments may shape future financial regulations.
