Isabel Schnabel, a member of the Executive Board of the European Central Bank (ECB), has warned that stablecoins could introduce vulnerabilities from legacy financial markets into the tokenized financial system. Speaking at a conference in Seoul, Schnabel emphasized that these assets could lead to capital outflows from the banking system and reduce the effectiveness of monetary policy. She believes central banks must modernize public money through tools like the digital euro. This is reported by Cointelegraph.com .
Comparing stablecoins to money market funds, Schnabel noted that while they are a useful innovation, they are prone to fire sales and bank runs. She also stated that the popularity of stablecoins could further solidify the global dominance of the USD. Currently, almost all stablecoins in circulation are pegged to the dollar, with other currencies holding a very small share of this market.
In response, the ECB is working in two directions: retail digital euro and wholesale tokenized central bank money. In March, the ECB introduced the Appia roadmap for European tokenized financial markets. The Pontes project, scheduled for launch in the third quarter of 2026, will act as a bridge between TARGET services and blockchain technology.
It was emphasized that central banks should not resist innovation but rather regulate it to maintain financial stability. Previously, ECB President Christine Lagarde also stated that stablecoins are not the best way to increase the international role of the euro, and that infrastructure based on central bank money should be developed instead.
Currently, the European Commission is reviewing the MiCA regulations governing the crypto-asset market. Major exchanges like Coinbase are participating in this process, calling for more competitive rules on stablecoins. Experts believe that regulatory mechanisms are crucial for maintaining trust in the financial system.
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