Rapid Growth of Dollar-Backed Stablecoins May Push ECB to Rethink Monetary Policy, Official Warns

Highlights:

• Sleijpen warned U.S. stablecoins could become systemically relevant if growth continues rapidly.
• He said rapid asset sell-offs might disrupt markets beyond the crypto sector.
• Sleijpen admitted the ECB may need to rethink monetary policy under sudden withdrawal pressure.

Olaf Sleijpen, a member of the European Central Bank’s Governing Council and President of De Nederlandsche Bank, has issued a clear warning as the value of dollar-linked digital tokens in the United States grows far faster than expected. Speaking to the Financial Times, he said the rapid expansion of this market could eventually push policymakers in Frankfurt to review their approach to financial stress.

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According to the Financial Times, Dutch central bank governor and ECB member Olaf Sleijpen warned that a stablecoin run could force the ECB to adjust its interest rate path, with effects extending to Europe’s economy and inflation. He noted that U.S. dollar stablecoins have…

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Surge in Dollar-Backed Token Issuance

Sleijpen remarks come as U.S. dollar-backed token issuance accelerates under new regulations in Washington. Earlier this year, President Donald Trump approved the GENIUS Act, which allows private companies to issue dollar-backed digital tokens on a larger scale. 

Data from DefiLlama shows that the sector’s market capitalization has increased by nearly 48% this year, reaching more than $300 billion. Analysts expect the stablecoin sector to continue rapidly growth. Citigroup anticipates the market could expand to $3.7 trillion by 2030, and the U.S. Treasury forecasts it may reach $2 trillion by 2028.

🇺🇸 US Treasury Secretary: "Stablecoins could reach $2 trillion by 2028"

During a hearing before the US Senate, Treasury Secretary Scott Bessent predicted that the market for dollar-backed stablecoins could surpass $2 trillion within three years.

The GENIUS Act, the stablecoin… pic.twitter.com/iLWYnYN3gU

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Furthermore, Sleijpen pointed to the rising dependence on these tokens for global transfers and trading. He warned that the sector could expand far beyond earlier estimates if current trends continue. “If stablecoins in the US keep growing at this pace, they will become systemically relevant at some point,” he said.

Stablecoin Risks Could Force ECB to Reassess Monetary Policy

USDT and USDC hold the largest global share and remain key instruments for international crypto activity. Both are tied to the U.S. dollar and form the strongest pair in this expanding market. Many of these tokens are backed by U.S. Treasuries, which creates risks when those assets must be sold quickly. 

Sleijpen warned that any rapid sell-off of these securities could disrupt markets far beyond crypto. “If stablecoins are not that stable, you could end up in a situation where the underlying assets need to be sold quickly,” he said. Such pressure, he noted, may force the ECB to “probably have to rethink monetary policy.”

His concern the how the bank would react if sudden withdrawals created pressure across the financial system. He said the first step would be to use tools that protect financial stability. However, he admitted that the direction of any policy shift is still uncertain. “I don’t know in which direction we would be going,” he said.

Sleijpen is a member of the ECB’s 26-member decision-making group, where officials have repeatedly expressed concerns that dollar-based tokens might weaken Europe’s monetary position. Earlier this year, adviser Jürgen Schaaf warned that the growth of these instruments could structurally weaken the euro unless authorities prepared a broader response.

Schaaf also highlighted potential risks from yield-bearing versions of these tokens. He explained that such products could shift savings away from local banks in regions where lending depends on deposits and suggested that if interest-bearing stablecoins became common.

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