An official from the European Central Bank has indicated that a run on stablecoins could necessitate adjustments to the ECB’s monetary policy rate path. The warning highlights potential risks associated with the growing popularity of stablecoins in the financial system. The official emphasized that the ECB is closely monitoring developments in the stablecoin market, given its implications for monetary stability. Concerns were raised about how a significant shift in stablecoin usage could impact liquidity and financial conditions across the eurozone. The ECB’s response may involve reassessing its current interest rate strategy to mitigate any adverse effects stemming from a stablecoin run.
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