While stablecoins worry many central banks, the ECB adopts a surprisingly measured tone. In its latest financial stability review published on November 20, it considers these assets to represent “only a limited risk” to the eurozone. A reassuring position, which the institution justifies by still marginal adoption and an already existing regulatory framework. However, behind this apparent calm, the ECB calls for vigilance given the rapid market evolution and emerging cross-border risks.
In Brief
- •The ECB assesses the risks related to stablecoins as limited in the eurozone, thanks to still marginal adoption.
- •Stablecoins are mainly used for crypto trading, with little use in payments or the real economy.
- •The MiCA regulation strictly governs stablecoins, notably forbidding their interest-based remuneration.
- •The ECB however alerts to the rapid market growth and risks linked to international regulatory differences.
A Contained Threat Thanks to Limited Adoption
According to analysts Senne Aerts, Claudia Lambert, and Elisa Reinhold, the main moderating factor lies in the low integration of stablecoins into traditional economic uses in Europe. These assets remain confined to operations within the crypto ecosystem, mainly in trading activities.
“Currently, the risks to financial stability arising from stablecoins are limited within the eurozone,” assure the authors of the European Central Bank report published on November 20.
The report recalls that, for now, alternative use cases, such as cross-border payments or daily transactions, remain marginal.
The ECB relies on several on-chain data to justify this reassuring position:
- •Crypto trading by far represents the primary use case for stablecoins, well ahead of other applications like remittances or peer-to-peer payments.
- •Transactions (under 250 dollars) account for only 0.5 % of the total stablecoin volume, according to data provided by Visa.
- •Dollar-backed stablecoins, such as USDT (Tether) and USDC (Circle), make up 84 % of the global market but remain little interconnected with eurozone financial markets.
- •The use of stablecoins for transactions involving real assets is considered very limited by the report authors.
As it stands, the ECB therefore believes that the European economy’s exposure to these instruments is too marginal to generate systemic risk. This current configuration, although temporary, allows the European Union to retain regulatory leeway without immediate urgency while keeping the ecosystem under close watch.
Towards Global Regulation of Stablecoins to Anticipate Cross-Border Risks
“The rapid growth of stablecoins justifies close monitoring, while risks related to cross-border regulatory arbitrage must be resolved,” warns the ECB in the same report.
While current risks are deemed low, the expansion dynamics of the stablecoin market could quickly change the situation, especially if some actors exploit regulatory differences between jurisdictions to circumvent European standards. The European Union thus calls for global harmonization of regulatory frameworks, a subject already raised by other monetary authorities.
In this preventive logic, the ECB highlights the safeguards brought by the MiCA regulation, adopted by European institutions. This framework notably prohibits payment of interest by issuers or crypto service providers on stablecoins to avoid any form of remuneration akin to banking products.
At the same time, the ECB closely monitors the evolution of U.S. regulation, notably around the GENIUS Act, whose first concrete provisions are not expected before 2026 or 2027. These calendar differences create gray areas that some issuers could try to exploit.
Beyond simple regulation, the issue also touches on European monetary sovereignty, questioned by the dollar’s hegemony in the stablecoin realm. This situation fuels arguments in favor of a digital euro, whose pilot phase is expected by 2027, with a potential issuance in 2029.