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The President of the Dutch Central Bank (De Nederlandsche Bank), Klaas Knot Olaf Sleijpen, warned on November 17 that rapidly expanding USD-pegged stablecoins are becoming systemically important to Europe’s financial system, posing new risks that could influence monetary policy.
https://twitter.com/Cointelegraph/status/1990309994328146381
According to Sleijpen, if major stablecoins were to destabilize, issuers might be forced to liquidate their reserve assets, including large amounts of U.S. Treasuries at high speed. Such a scenario could amplify market stress and potentially trigger liquidity shocks across global financial markets.
The comments, reported by the Financial Times, signal a major shift: stablecoins are no longer viewed solely as a regulatory concern but as a macro-economic volatility factor capable of influencing central bank decision-making.
Rapid Growth of the Stablecoin Market Raises Systemic Alarms
The global stablecoin market is now valued at approximately USD 310 billion. Two issuers dominate:
- Tether (USDT): USD 183 billion
- USD Coin (USDC): USD 74 billion
The U.S. Treasury estimates this market could grow to USD 2 trillion by 2028, dramatically expanding its systemic footprint.
Sleijpen warned that a large stablecoin experiencing a run, which is similar to a traditional bank run, would likely trigger mass liquidation of reserve assets, most of which are U.S. Treasuries and other “safe assets.” Such forced selling could drive significant market volatility and impact global interest rates.
The European Central Bank (ECB) has expressed concern that such events could disrupt the transmission of monetary policy, limiting the central bank’s ability to control inflation and financial conditions.
Risks Beyond Regulation: New Headache for EU Policymakers
Sleijpen’s comments illustrate a pivotal development: central banks are beginning to view stablecoins as a risk that extends beyond financial stability regulation into the domain of macro-economic management.
Even as the EU implements its landmark MiCA (Markets in Crypto-Assets) regulatory framework, Sleijpen warned that the stablecoin market is expanding at a pace that could outgrow regulatory oversight.
He stated that if a destabilization event were large enough, the ECB might be forced to “reconsider monetary policy,” directly linking stablecoin stability to the possibility of interest rate adjustments.
Regulators are particularly troubled by the market concentration within the sector. With Tether and Circle controlling the majority of the USD-denominated stablecoin supply, a failure of a single major issuer could create a single point of failure, exposing central banks to bailout pressure, which is something they aim to avoid.
