ECB Warns Stablecoins Like Tether's USDT, Circle's USDC Could Pose Global Financial Risks

The European Central Bank (ECB) issued a report warning that stablecoins, such as Tether's USDT and Circle's USDC, present a global financial stability risk. The primary concern is that significant growth in stablecoins could lead to retail deposit outflows from eurozone banks, diminishing a vital funding source and leaving banks with more volatile funding overall. With stablecoins reaching a market capitalization of over $280 billion, the report notes that a 'run' on these assets could force a fire sale of their reserve assets, potentially impacting U.S. Treasury markets and triggering a broader financial crisis. This stance aligns with previous concerns voiced by ECB board members. However, the analysis faces counterarguments, such as Coinbase's Chief Policy Officer suggesting that full-reserve backing makes stablecoins safer than traditional banking.

(Source：CoinDesk)