Europe’s Largest Asset Manager Warns of Stablecoin Boom That Could “Destabilize the Global Payment System”
Europe's largest asset manager warns that the rise of stablecoins in the United States could lead to a major shift in monetary flows, potentially destabilizing the international monetary system.
Amundi, the largest asset manager in Europe, is concerned that the growing adoption of dollar-backed stablecoins—especially following the introduction of the Genius Act (Guiding and Establishing National Innovation for U.S. Stablecoins)—could trigger a significant change in monetary flows and undermine the global financial system. The U.S. Senate passed this bill last month, which aims to create a regulatory framework for dollar-pegged stablecoins. The bill is also expected to gain approval from the House of Representatives, paving the way for enactment under Donald Trump.
Although Vincent Mortier, Chief Investment Officer at Amundi, told Reuters he does not have a firm stance on stablecoins, he expressed concerns that wide-scale adoption could affect financial stability by increasing “dollarization” and introducing risks related to liquidity and acceptability.
“It could potentially destabilize the global payment system. I'm not sure that's a good idea,” he summarized.
Currently, 98% of stablecoins are backed by the dollar, but over 80% of stablecoin transactions take place outside the United States.
Risk of “Increased Dollar Weakness”
JPMorgan expects the total value of stablecoins in circulation to double to \$500 billion over the next few years, while some estimates predict that stablecoins could reach \$2 trillion in circulation by then.
Notably, backing stablecoins with the dollar will drive the purchase of U.S. Treasury bonds, which is advantageous for the United States—especially given recent challenges in that area—but it could also introduce complications.
“In doing so, you’re creating an alternative to the U.S. dollar, which could lead to increased weakening of the dollar. Indeed, if a country encourages the use of a stablecoin, it could be seen as sending the message that the dollar isn’t as strong as it seems,” warned Vincent Mortier.
In April, Italian Finance Minister Giancarlo Giorgetti warned that U.S. policies on stablecoins posed an even greater threat to Europe’s financial stability than Trump’s trade war.
He argued that allowing people to access the dollar without needing a U.S. bank account would be attractive to millions and could undermine the monetary sovereignty of other countries.
