ECB warns stablecoins threaten bank funding as Visa, Mastercard expand

New paper flags threaten bank funding just as payments giants ramp up tokenized settlements.

The European Central Bank (ECB) has taken a swipe at the stablecoin industry, warning that the widespread use of private tokens could reduce its pressure on monetary policy and tighten traditional funding bases for lenders. In a new research paper, the ECB argues that if euro-denominated stablecoins gain significant traction within the bloc, they could “undermine the effectiveness of monetary policy” by shifting deposits away from commercial banks and into tokenized rails on the fringes of the regulated system. The authors warn that such a change could “impede the ability of creditors to support the real economy,” especially in stressful scenarios where the flight of savings accelerates.

The warning comes as major payment companies move to normalize stablecoin settlements. SoFi and Mastercard recently unveiled a partnership that will enable SoFiUSD, a fully-reserved dollar stablecoin, to be used for payments across Mastercard’s global network, which spans SoFi Bank and the Galileo platform. Visa, meanwhile, is expanding its partnership with Bridge and aims to bring stablecoin-related cards to more than 100 countries after seeing volume on Bridge “more than quadruple” last year. Industry advocates see these moves as evidence that stablecoins are becoming more than just business collateral, becoming mainstream payment infrastructure, and crypto.news is already tracking how tokenized cash is bleeding into everything from money transfers to Web3 gaming payments.

Regulators see a different risk profile. The recent split in the US policy debate over deposit-like “rewards” and “yields” shows how central banks and lawmakers are concerned that pseudo-deposit products could replicate the volatility of funds within crypto packages. The ECB document effectively extends this concern to Europe, indicating that any large-scale use of euro stablecoins will likely face severe MiCA-era restrictions on reserves, disclosure and access to central bank backing.

A macro view of the crypto market

Markets are now taking it seriously. Bitcoin (BTC) is trading around $67,000-$68,000 over the past 24 hours, Ethereum (ETH) is near $2,000, and Solana (SOL) is in the mid-$80s as traders view the ECB memo as a medium-term structural story rather than an immediate shock. But where the paper bites is telling: stablecoins are no longer a side quest in crypto, but a real fault line between central banks, banks and platforms that now link tokens to daily payments.