Senior officials at the European Central Bank warn: The systemic risks of stablecoins cannot be ignored; a run on them could force a shift in interest rate policy.

As the market size of US dollar-pegged stablecoins expands rapidly, a senior policymaker at the European Central Bank (ECB) has warned that if there is a run on this market, the resulting shockwaves could force central banks to reconsider their interest rate paths.

According to a November 17th report by the Financial Times, Olaf Sleijpen, Governor of the Dutch Central Bank and a member of the ECB's Governing Council, issued this warning in an interview. He pointed out that these digital tokens pegged to fiat currencies such as the US dollar will at some point become “systemically important.”

The concern comes against a background of stablecoins surging 48% this year to over $300 billion after President Trump introduced new rules paving the way for private sector issuance. Many of these stablecoins are backed by assets such as US Treasury securities.

Sleijpen said that if stablecoins are “not stable enough,” it could lead to a panic sell-off of their underlying assets. He warned this would not only threaten financial stability but also ripple through the broader economy and inflation, possibly forcing the ECB to act.

Sleijpen’s warning reflects the widespread concerns of ECB officials over the rise of stablecoins. He explained that a rapid sell-off of underlying assets could first impact financial stability and then affect the real economy and inflation.

In such a scenario, the ECB “may have to rethink monetary policy,” although he added that the direction of adjustment (rate cuts or hikes) remains uncertain and that financial stability tools should be used first.

Current Interest Rate Stance Unchanged

Despite warning of future risks, Sleijpen is relatively optimistic about current monetary policy. He believes that conditions in the eurozone have “slightly improved” since June, trade uncertainties have decreased, economic growth is better than expected, and inflation basically aligns with the 2% medium-term target.

Therefore, he said, “there is no reason” to adjust interest rates based on current information. On inflation risks, he considers them “balanced” at present, which differs from the more hawkish view of Isabel Schnabel, a member of the ECB’s Executive Board, who sees risks as “slightly tilted to the upside.” According to LSEG data, investors currently see only a 25% chance of another 25-basis-point rate cut by the end of next year.

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