The European Central Bank warns of the cross-border regulatory arbitrage risks of stablecoins, calling for a unified regulatory framework on a global scale.

According to Mars Finance, the financial stability review preview released today by the European Central Bank (the formal report will be published on Wednesday) shows that by 2025, the total market capitalization of stablecoins will exceed 280 billion USD, accounting for about 8% of the entire crypto market. USDT and USDC together account for nearly 90%, with reserve assets reaching the scale of the top 20 global money market funds. The European Central Bank's report points out that if stablecoins are widely adopted, it may lead households to convert some bank deposits into stablecoin holdings, weakening banks' retail funding sources and increasing financing fluctuations. Although MiCAR has prohibited European issuers from paying interest to curb such transfers, banks continue to call for similar restrictions to be implemented in the United States. In addition, the rapid growth of stablecoins and their association with the banking system may also trigger concentrated capital withdrawals during a crisis. The report emphasizes the risks of cross-border “multi-issuance mechanisms” and warns that EU issuers may struggle to meet global redemption requests, calling for pre-access additional safeguards and promoting global regulatory alignment.