Central Banks Sound Warning Over Stablecoin Risks

Central banks are sounding the alarm about the increasing use of stablecoins for international payments, citing potential threats to financial integrity.

A report by Deutsche Bank found that US participation in cryptocurrency rose from 7% to 12% between February and March, with a resurgent interest in bitcoin exchange-traded funds (ETFs) pulling in around $1.3 billion in net inflows. The survey also showed an uneven recovery for crypto prices, which have been stabilizing following a tumultuous start to the year.

The use of stablecoins has been growing rapidly, with 13% of middle market firms reporting their use, but adoption remains low, with only 5% using cryptocurrencies. Even among those that have adopted digital assets, usage is tightly bounded and largely confined to specific payment functions or isolated transactions.