The eurozone’s main banks remain resilient, but shifting financial-market conditions, the rapid rise of artificial intelligence and the growing role of crypto assets all require close monitoring, the European Central Bank has warned.

In its Supervisory Review and Evaluation Process (SREP), the ECB conducts its annual health check of the bloc’s major lenders, assessing how they manage risks and whether capital requirements need to be adjusted to ensure banks can absorb potential losses.

The ECB also highlighted the potential threat that expanding stablecoins — especially those backed by the US dollar — pose to European monetary sovereignty and financial stability.

Concerns mount over rapid stablecoin growth

“In an era of rising geopolitical fragmentation and rapid digital innovation, stablecoins have emerged as both a symptom and a driver of change in the international monetary and financial system,” the institution stated repeatedly.

New Dutch central bank governor Olaf Sleijpen went even further. “If stablecoins are not stable, you could end up in a situation where the underlying assets need to be sold quickly,” he said in an interview with the Financial Times.

Sleijpen added that these digital tokens could create risks for financial stability, the economy and inflation in Europe — risks that might eventually force the ECB to act. This year, the volume of digital tokens tracking currencies such as the US dollar has surged by 48 per cent to more than $300bn, following new rules enacted by US President Donald Trump that allow private-sector issuance of stablecoins. Many of these tokens are backed by US Treasuries.

If stablecoins became unstable, Sleijpen warned, the consequences would hit financial stability first and then spill over to the broader economy and inflation. “In such a scenario, the ECB would probably have to rethink monetary policy,” he said, noting that he could not predict whether a rate cut or increase would be needed. Financial-stability tools, he stressed, should be deployed first.

Sleijpen took over from Klaas Knot in July after Knot completed his second seven-year term at the helm of De Nederlandsche Bank. Knot is considered a potential contender to succeed Christine Lagarde as ECB president when her term ends in October 2027.

Nobel Prize-winning economist Jean Tirole has also sounded the alarm, warning that governments may be forced into multibillion-dollar bailouts if the tokens unravel. “I am very, very worried about supervision of stablecoins and the possibility of a run by depositors if doubts materialised over the underlying reserve assets to which the digital tokens were pegged,” he told the Financial Times earlier this year.

Sources:

https://www.lemonde.fr/en/economy/article/2025/11/19/geopolitical-uncertainty-ai-and-stablecoins-are-on-the-european-central-bank-s-radar_6747594_19.html

https://www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250728~e6cb3cf8b5.en.html

https://www.ft.com/content/445e7fb6-1ec8-47f3-b74d-87f7960e85d6

https://www.ft.com/content/d6dd3640-7790-4598-ad1c-9838419c4c4c

https://www.bankingsupervision.europa.eu/activities/srep/2025/html/ssm.srep202511_aggregatedresults2025.en.html