Overview
- ECB economists find rising stablecoin adoption correlates with lower retail deposits and reduced lending to firms across the euro area.
- Deposit outflows push banks toward costlier, more volatile wholesale funding, undermining lenders’ capacity to finance the real economy.
- With most tokens dollar‑denominated, wider European use could import U.S. monetary conditions and weaken euro control over financial settings.
- Systemic impact remains limited given roughly €17 trillion in euro‑area deposits versus about $300 billion in global stablecoins, though projections cited put the market near $2 trillion by 2028.
- The paper calls for stronger rules on reserves, redemption assurances, capital buffers and oversight, as payments giants including Visa, Mastercard and SoFi expand stablecoin settlement initiatives.