The European Central Bank has warned of the risks of cross-border regulatory arbitrage involving stablecoins and called for a unified regulatory frame...
TL;DR
The European Central Bank warns that stablecoins, now over $280B, could weaken bank deposits and trigger crises. It calls for unified global regulation to address risks like cross-border arbitrage and capital outflows.
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According to Foresight News , the European Central Bank's Financial Stability Review preview released today shows that as of November 2025, the total market capitalization of stablecoins has exceeded $280 billion, accounting for approximately 8% of the entire crypto market. USDT and USDC together account for nearly 90% of this, and their reserve assets are equivalent to the size of the world's top 20 money market funds.
A European Central Bank report points out that widespread adoption of stablecoins could lead households to convert some of their bank deposits into stablecoin holdings, weakening banks' retail funding sources and increasing funding volatility. While MiCAR has prohibited European issuers from paying interest to curb such transfers, banks are still calling for similar restrictions in the US. Furthermore, the rapid growth of stablecoins and their linkage to the banking system could trigger concentrated capital outflows during crises. The report emphasizes the risks of cross-border "multi-issuance mechanisms," warning that EU issuers may struggle to meet global redemption requests, calling for pre-access safeguards, and promoting global regulatory alignment.