The European Central Bank (ECB) may soon be compelled to view stablecoins not just as a regulatory concern, but also as a potential source of macroeconomic shocks, according to Dutch central bank governor Olaf Sleijpen.
In a Financial Times interview, Sleijpen warned that the fast-growing dollar-pegged stablecoins could become systemically relevant to Europe’s financial ecosystem. He said that if the tokens were to destabilize, they could affect financial stability, the wider economy and even inflation.
“If stablecoins are not that stable, you could end up in a situation where the underlying assets need to be sold quickly,” he said, underscoring that rapid liquidation could amplify stress across markets.
Sleijpen said the ECB may be forced to “rethink monetary policy” if the shocks were strong enough. However, he emphasized that it was unclear whether such a scenario would need rate hikes or cuts.
Stablecoin market growth from 2020 to 2025. Source: RWA.xyz
Stablecoin market cap could reach $2 trillion in 2028
Sleijpen’s comments come during a year of explosive growth for the stablecoin sector. CoinGecko data shows a nearly 50% increase in stablecoin market cap this year. At the time of writing, stablecoins have an overall valuation of $310 billion.
Tether’s USDt (USDT), the top US dollar-pegged stablecoin on the market, grew from a $127 billion market cap in November 2024 to a $183 billion market cap over the past year, marking a 44% increase.
USDC (USDC), the second-largest stablecoin asset, grew by nearly 100% from $37 billion to $74 billion during the same time.
In April, the US Department of the Treasury reported that evolving market dynamics have the potential to accelerate the growth of stablecoins. The Treasury predicted that stablecoins could reach a $2 trillion market cap by 2028.
Sleijpen said that as dollar-pegged stablecoins continue to grow, the sector could reach a scale where their fluctuations would directly matter to Europe’s economic outlook.
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Concerns over dollar-backed stablecoins in Europe
In April, ECB Executive Board member Piero Cipollone wrote an article highlighting concerns about the growth of dollar-backed stablecoins.
He argued that launching a central bank digital currency (CBDC) could help preserve monetary sovereignty in the eurozone. He said that a digital euro can limit the potential for foreign currency stablecoins to become a more common medium of exchange in Europe.
Italy’s Minister of Economy and Finance, Giancarlo Giorgetti, also expressed concerns over US dollar stablecoins. In April, Giorgetti stated that stablecoins pose a more significant threat to European financial stability than trade tariffs.
While concerns over stablecoins were apparent, Sleijpen’s comments highlight a more pressing concern: that stablecoin issuers could become vectors for financial instability. If large issuers offload reserves at scale, a contagion could extend into liquidity conditions, asset prices and inflation.
In September, Nobel Prize-winning economist Jean Tirole warned that governments could face multibillion-dollar bailout pressures if major stablecoins were to unravel.
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