Head of European Stability Mechanism: Stablecoins Without Proper Collateral and Management Pose a Threat to Financial Stability

According to ChainCatcher, citing Bloomberg, a senior EU policymaker stated that stablecoins, if lacking proper collateral and management, will threaten financial stability.

Pierre Gramegna, President of the European Stability Mechanism (ESM), said in Washington on Wednesday that if stablecoins become mainstream and cannot be guaranteed like central bank currencies, they will pose a risk to the global financial system. He emphasized that he is not opposed to stablecoins, but they must operate within a framework that ensures the safety of consumers and financial participants. In addition, although Martin Kocher, Governor of the Austrian Central Bank, believes that stablecoins will not be as popular in the eurozone as in other regions, Gramegna pointed out that the EU cannot afford to be marginalized in the cryptocurrency sector. Since 99% of stablecoins are denominated in US dollars, if Europe does not launch euro-denominated stablecoins, it will miss out on opportunities. He also believes that cash, digital currencies, and stablecoins can coexist.