Christine Lagarde highlights financial stability concerns as stablecoin market capitalization surges from USD 10 billion to USD 300 billion in six years.
European Central Bank President Christine Lagarde flagged growing risks from stablecoins, which have ballooned to a USD 300 billion market from less than USD 10 billion six years ago. Nearly 90% of the market is dominated by Tether and Circle, both dollar-denominated and based in the U.S. and El Salvador.
The ECB moved early to regulate stablecoins under the Markets in Crypto-Assets Regulation (MiCAR) in 2024, aiming to mitigate financial stability risks. Meanwhile, the U.S. is pursuing broader measures like the GENIUS Act, reflecting heightened scrutiny in advanced economies.
Concerns have intensified as stablecoin adoption deepens ties to the traditional financial system, particularly in Latin America and Africa, where risks are most acute.