The world’s central banks long ago stopped discussing whether stablecoins are risky. Their main concern now is who will control them and how.
On April 20, Pablo Hernandez de Cos, CEO of BIS, called for global cooperation on stablecoins, describing it as “critical.”
The couch for International Settlements, often called the central bankers’ central bank, has raised concerns about stablecoins before, but the language they have used is much sharper now. De Cos warned of runs that could cause market stress, of dollar-pegged tokens accelerating the dollarization of developing economies, and of fragmented regulatory frameworks that could arbitrage private companies across borders.
That is the language of systemic risk, distinct from the investor protection framework that dominated previous debates.
A stablecoin is a cryptocurrency designed to maintain a stable value against a fiat currency. Tether’s USDT and Circle’s USDC are the two largest, together accounting for about 85% of the $315 billion worth of stablecoins currently in circulation.
Unlike a savings account or legal tender, a stablecoin functions as a $1 private IOU, backed by reserves like U.S. Treasury bonds and built for speed across borders and crypto markets. At that scale, this convenience is exactly what central banks now find alarming.
Central banks worry about deposits, not links
Concerns about bond stability are real: If an issuer can’t maintain $1 during heavy redemptions, the result is a run that forces a rapid liquidation of reserves, injecting volatility into Treasury markets.
The deeper concern, however, is what stablecoins do to the banking system as they grow. When people hold tokens instead of bank deposits, banks lose the funding base they use to make loans. When payments are processed through private token networks instead of bank rails, banks lose revenue from fees, transaction data, and customer relationships.
The ECB has been explicit about this chain: stablecoins could cost European banks all three at once, while dollar-denominated tokens could gain a foothold in markets where the euro is supposed to be dominant.
CryptoSlate reported on the ECB’s modeling in November 2025, when policymakers were warring over what $2 trillion in stablecoins would mean for European financial stability. Their conclusion was that stablecoins at that scale become a direct transmission channel for US financial stress to European banks.
Citi’s April 2026 study predicts that stablecoin issuance will reach $1.9 trillion by 2030 under the base case, with $4 trillion possible in higher adoption scenarios. These figures are now actively shaping the way central banks determine their planning horizons.
The deposit demand has become urgent for banks. If stablecoins can offer competitive returns, consumers have a clear incentive to shift funds from insured bank accounts to digital dollar wallets, and the US banking lobby has estimated that stablecoins could drain roughly $500 billion from deposits by 2028.
The Federal Reserve added another complication in a March 2026 note on payments stablecoins and cross-border payments: A large enough stablecoin sector outside the banking system could dilute the way monetary policy reaches the real economy, because the Fed’s tools work through banks, and a parallel network that bypasses them weakens their reach.
The outflow of deposits is mainly taking place in developed economies, because the problem of dollarization is global. De Cos warned that stablecoins could accelerate developing economies’ structural dependence on the dollar while making it easier to circumvent capital controls, leading to greater inflows during stable periods and faster capital flight during stress.
We’ve seen this happen in countries like Nigeria, Argentina and Turkey, where households are already using dollar-pegged stablecoins to protect their savings from local currency devaluation, completely bypassing official exchange rates and domestic banking systems.
Standard Chartered has estimated that banks in emerging markets could lose as much as $1 trillion in deposits to stablecoins. The IMF has described stablecoins as the digital edge of the dollar system, a phrase that perfectly captures both their utility and the structural threat.
It implies that stablecoins are expanding the dollar’s dominance faster and more directly than the eurodollar system ever did, through private companies rather than state institutions, leaving central banks in smaller economies with no practical mechanism to slow the outflow.
The real fight is over who controls the movements of stablecoins
The debate has reached the European political leadership, and positions are not aligned.
On April 17, French Finance Minister Roland Lescure called the current volume of euro-pegged stablecoins “not satisfactory” and backed Qivalis, a consortium of European banks including ING, UniCredit and BNP Paribas, which is building a euro-denominated stablecoin. Lescure also urged European banks to explore tokenized deposits, describing the initiative as a defense of European payment sovereignty against US dominance.
It’s hard to miss the tension in that position. European policymakers are afraid of stablecoins and at the same time fear being excluded from the infrastructure race. If dollar tokens become the standard settlement layer for digital payments worldwide, a Europe that blocked the development of stablecoins at home will certainly end up on the American track.
At the same time, the Banque de France’s first deputy governor, Denis Beau, has called for stricter MiCA restrictions on non-euro stablecoins used in everyday payments, even as Lescure endorses the technology.
Europe is pursuing two policy tracks at once without resolving the contradiction: policymakers want the efficiency of token money movements, and they are deeply uncomfortable with private issuers controlling this.
Whether regulators ultimately treat stablecoins as payment tools, deposit substitutes, or shadow money market products will determine how much of the monetary system private issuers are allowed to absorb.
That reclassification takes place in real time, and the outcome will determine how money moves over the next decade.