European Central Bank (ECB) board member Isabel Schnabel warns that stablecoins pose financial stability risks by importing vulnerabilities from traditional money markets into tokenized finance. Speaking at a Bank of Korea conference in Seoul, Schnabel says stablecoins can increase the risk of “runs,” similar to dynamics seen in certain short-term funding markets. She also argues that stablecoin structures may interfere with monetary policy transmission and, by reinforcing reliance on the U.S. dollar, could strengthen dollar dominance.
Schnabel’s comments, reported by multiple outlets, frame stablecoins as a channel through which old market flaws—such as investor withdrawals under stress—could be reproduced in new tokenized systems. The ECB perspective emphasizes that stablecoin adoption and related tokenized finance activities may not remain confined to crypto markets, but can affect broader financial conditions and policy goals. The warnings underline the ECB’s focus on how stablecoin arrangements could interact with liquidity, settlement, and regulatory oversight in ways that heighten systemic risk.
