ECB official says stablecoins risk importing old market flaws
ECB Executive Board member Isabel Schnabel warned that stablecoins could import familiar financial risks into tokenized finance, including bank disintermediation, runs, fire sales, and weaker monetary-policy transmission. She said widespread use of dollar-backed stablecoins could further entrench U.S. dollar dominance, since nearly all circulating stablecoins are dollar-denominated. Her response is not to block innovation but to modernize public money through a retail digital euro and tokenized wholesale central bank settlement. She pointed to the ECB’s Appia roadmap and Pontes settlement bridge as part of this effort. The remarks fit a broader ECB view that Europe should build tokenized infrastructure anchored in central bank money rather than rely on euro stablecoins. The debate is intensifying as the EU reviews MiCA, with crypto firms pushing for looser rules and the ECB warning against weakening bank lending or policy control.
