The European Central Bank warns that stablecoins pose a threat, as a run could impact the $25 trillion U.S. Treasury market

According to a report by The Defiant, the European Central Bank (ECB) has indicated in its latest report that stablecoins pose risks to financial stability, as a loss of investor confidence in their redemption capabilities could lead to a de-pegging. The report states that Tether and Circle, as one of the largest holders of U.S. Treasury securities, could trigger a sell-off of reserve assets in the event of a run, impacting the $25 trillion U.S. Treasury market.

The ECB criticizes stablecoins for their inherent vulnerabilities and their connections to traditional finance, highlighting that yield-bearing stablecoins may divert bank deposits. The MiCA regulation has already banned yield-bearing stablecoins, and the U.S. banking sector is also calling for similar bans.

According to DeFiLlama data, the market capitalization of stablecoins has surpassed $300 billion, with USDT and USDC accounting for over 85%. Despite pressure from the banking sector, the U.S. continues to embrace the stablecoin industry under the push of the Trump administration. The GENIUS Act, passed in July, aims to reduce risks associated with DeFi stablecoins and is expected to put pressure on yield-bearing stablecoins.