Key Takeaways:

• Dutch central bank governor warns a major stablecoin run could force the ECB to adjust interest rates.
• Europe tightens MiCA rules as Tether exits and banks launch euro-backed stablecoins.
• Destabilizing stablecoin events could potentially spill over into the broader banking and payments systems, warn policymakers.

A sudden run on large stablecoins could pose enough financial disruption in Europe that the European Central Bank (ECB) might be forced to adjust interest-rate policy, warned Olaf Sleijpen, governor of the De Nederlandsche Bank and a member of the ECB’s Governing Council.

In an interview with Financial Times, he cautioned that if major stablecoins lose investor confidence, their issuers may trigger large-scale asset sales that could ripple into funding markets and ultimately impact inflation and growth in the euro zone.

Sleijpen said, “If stablecoins in the U.S. increase at the same pace as they have been increasing … they will become systemically relevant at a certain point.”

He pointed to the roughly $300 billion (and growing) size of the stablecoin market as of 2025 as raising red flags. 

While the ECB and other European regulators already have financial-stability tools in place, Sleijpen stressed that in the event of a large-scale shock from stablecoins the ECB could face a scenario where it needs to revisit the stance of its policy rates, though he did not specify whether rates would move up or down.

Why stablecoins matter for monetary policy

Stablecoins have garnered increasing attention from central banks. Their rapid growth, deepening integration into payments and crypto markets, and links with conventional financial assets mean that a crisis in this market could spill over into the “real economy”.

For example:

• If a large issuer cannot meet redemption demands, it may need to liquidate reserve assets (often short-term government debt or highly liquid instruments). This could increase funding stress and raise borrowing costs.
• The dominance of U.S.-dollar-denominated stablecoins in Europe raises concerns that monetary policy transmission in the eurozone could be weakened if euro-area residents increasingly hold fiat-dollar tokens rather than euro-denominated assets.
• The paper from the European Parliament’s economic-governance unit argued that while a large shift to stablecoins in the euro area may be unlikely without state support, the possibility of foreign-currency stablecoins undermining the euro’s role is real.

Regulatory response and other developments

• Tighter EU rules for stablecoins

The ECB and the European Systemic Risk Board (ESRB) have urged Brussels to curb the “multi-issuance” model, where an issuer offers the same token from both EU and non-EU entities, because a rush to redeem could overwhelm EU-based reserves.

Moreover, the Markets in Crypto‑Assets Regulation (MiCA) sets requirements for stablecoin issuers in the EU (reserve backing, audited disclosures, etc.). The focus is on preserving the euro’s sovereignty and guarding against regulatory arbitrage. 

• Tether retreats from Europe amid MiCA crackdown

Tether Limited, the issuer of USDT, has officially discontinued its euro-backed stablecoin, EURT, citing the EU’s tighter MiCA regulations. EURT holders have until Nov. 25, 2025, to redeem their tokens, and no new issuance requests have been accepted since 2022. 

The move marks a clear retreat from the European market, where exchanges have also delisted USDT due to non-compliance with MiCA’s issuer authorization rules. 

• Growth of euro-backed stablecoins and strategic European push

As a counterweight to U.S.-dominated dollar stablecoins, European banks are acting: a consortium of nine major banks, including ING Group, UniCredit S.p.A. and CaixaBank, have announced plans to launch a euro-backed stablecoin compatible with MiCA, targeting a rollout in the second half of 2026.

BREAKING: 🇪🇺 NINE MAJOR EUROPEAN BANKS TO LAUNCH A MICA COMPLIANT EURO STABLECOIN. pic.twitter.com/OjvolddNNo

— Ash Crypto (@AshCrypto) September 25, 2025

Digital euro: Europe’s answer to stablecoin risks?

The European Central Bank’s digital euro project is emerging as a strategic counterweight to privately issued stablecoins and a safeguard for Europe’s monetary autonomy. The ECB aims to be technically ready for issuance by 2029, pending final EU legislation in 2026.

The digital euro would complement banknotes and extend the benefits of cash to the digital sphere. This is important because euro cash brings us together.

Europeans would have the freedom to use the digital euro for any digital payment, online or offline, throughout the euro… pic.twitter.com/XzNZbl6mD8

— European Central Bank (@ecb) October 31, 2025

In June 2025, ECB Executive Board member Fabio Panetta assured that the project is designed to avoid liquidity shocks or deposit outflows, with holding limits and no interest payments to prevent competition with commercial banks.

 By keeping digital payments inside the ECB’s monetary framework, it limits exposure to U.S.-dollar stablecoins and supports long-term financial stability without distorting interest-rate decisions.