European Central Bank Official Warns About the Impact of a Potential Stablecoin Sell-Off

Olaf Sleijpen, a member of the European Central Bank’s Governing Council, warned that the rapid growth of dollar-based stablecoins could lead to systemic importance, posing risks to Europe's economy. A large-scale redemption event, or run, could force issuers to quickly sell underlying assets like U.S. Treasury holdings, driving up yields and causing market turbulence that spills over into European bond markets. This instability might compel the ECB to adjust its monetary policy, potentially changing interest rates, although financial stability tools would be prioritized first. Another ECB adviser, Jürgen Schaaf, previously cautioned that dominant stablecoin use could weaken the ECB's monetary steering ability, mirroring dollarized economies and reinforcing the U.S. financial position while increasing Europe's borrowing costs and dependence. The warnings come as the stablecoin market capitalization exceeds $300 billion, with projections suggesting it could reach trillions by 2030.

(Source：BeInCrypto)