Dutch central bank official says rapid liquidation of reserves could ripple across European markets
European regulators are growing increasingly uneasy as the stablecoin market expands at a pace that could influence the continent’s financial stability. Dutch central bank governor Olaf Sleijpen cautioned that a sudden loss of confidence in major dollar-pegged stablecoins could force issuers to unwind billions in reserve assets, triggering broader market stress.
Sleijpen noted that the European Central Bank (ECB) may soon need to treat stablecoins not simply as a regulatory item but as a potential source of macroeconomic disruption.
Stablecoin Panic Could Trigger Broad Liquidations
In a recent interview, Sleijpen warned that if investors were to rush out of stablecoins during a shock event, issuers might have to rapidly sell government bonds and other reserve assets to meet redemptions. “If stablecoins turn out not to be as stable as expected, issuers could be forced into sudden liquidations,” he said.
He emphasized that such forced selling could intensify volatility across multiple markets, potentially influencing lending conditions and price stability across Europe. The scale of the impact, he added, may be large enough to prompt the ECB to reassess monetary policy, though it remains unclear whether that would require tightening or easing.
A Sector Growing Too Large to Ignore
The warning comes during a period of rapid expansion in the stablecoin industry. The market’s total value has climbed to about $310 billion following nearly 50% growth this year, according to market data.
• USDt has jumped from $127 billion to $183 billion in the past year.
• USDC has nearly doubled, rising from $37 billion to $74 billion.
U.S. Treasury analyses suggest the sector could reach $2 trillion by 2028, a scale that Sleijpen believes would make fluctuations in dollar-backed tokens directly relevant to Europe’s economic outlook.
Other European leaders have voiced similar concerns. Some warn that reliance on dollar-denominated stablecoins could weaken the eurozone’s monetary sovereignty unless a digital euro is introduced.
Sleijpen’s latest remarks underscore a deeper fear among policymakers: large-scale reserve sales by stablecoin issuers could transmit financial shocks faster than existing regulations are designed to handle.
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