The European Central Bank warned of the threat posed by stablecoins, stating that a run on them could impact the $25 trillion US Treasury market.

According to Mars Finance, citing The Defiant, a recent report from the European Central Bank (ECB) states that stablecoins pose a risk to financial stability, and a loss of investor confidence in their redemption capabilities could trigger a de-pegging. The report notes that Tether and Circle, as among the largest holders of US Treasury bonds, could trigger a run on these assets, potentially impacting the $25 trillion US Treasury market. The ECB criticizes stablecoins for their inherent fragility and linkages to traditional finance, arguing they pose a financial stability risk, and points out that yield-generating stablecoins could divert bank deposits. The MiCA regulation already prohibits yield-generating stablecoins, and the US banking industry has called for a similar ban. According to DeFiLlama data, the market capitalization of stablecoins has exceeded $300 billion, with USDT and USDC accounting for over 85%. Despite pressure from the banking industry, the US continues to embrace the stablecoin industry under the Trump administration's push. The GENIUS Act, passed in July, aims to reduce the risks of DeFi stablecoins and is expected to put pressure on yield-generating stablecoins.