Bank of Italy Models Ether-to-Zero Scenario in Stress Test

The Bank of Italy published research modeling the consequences of Ether (ETH) falling to zero, treating the Ethereum network as critical financial infrastructure. Economist Claudia Biancotti examined how an extreme price shock affects Ethereum-based financial services by focusing on validators' economic incentives, as they are rewarded in ETH. A price collapse would rationally cause some validators to exit, reducing the network's total stake, slowing block production, and weakening its ability to guarantee timely settlement.

This study frames Ethereum not just as a speculative asset but as a core settlement layer for onchain finance. Consequently, market risk in the native token could translate into operational and infrastructure risk for stablecoins and tokenized securities relying on Ethereum for transaction ordering and finality. The Bank of Italy concluded that regulators face a trade-off: either deem public chains unsuitable for regulated finance due to reliance on volatile tokens, or permit their use while imposing strict risk mitigation measures, such as contingency plans and minimum economic security standards for validators.

(Source：Cointelegraph)