- The Threat: Sweden’s central bank warns stablecoins could siphon deposits from commercial banks, raising borrowing costs.
- The Divide: The report contrasts the EU’s defensive MiCA restrictions against the US GENIUS Act dollar-dominance strategy.
- The Gatekeepers: Both regions continue to block stablecoin issuers from accessing full central bank settlement rails.
Sweden’s Sveriges Riksbank has released a new analysis on the role of stablecoins in the modern financial system. The report discusses how stablecoins have expanded beyond their original place in crypto trading and now sit at the center of international regulatory debates.
The world’s oldest central bank argues that if households shift savings from insured deposits to private digital assets, it could force banks to tighten lending, driving up costs for mortgages and business loans.
US GENIUS Act vs. EU Caution
The Riksbank talked about similarities between the United States and Europe in the treatment of stablecoin issuers. Both regions allow, in principle, the use of central bank reserves as backing assets, yet practical barriers still prevent issuers from holding such balances at scale.
In the European Union, MiCA creates a legal pathway for backing stablecoins with central bank money. However, the ECB and national central banks, including Sweden’s, have kept restrictions in place.
They permit accounts for payment purposes but limit balances to what is necessary for day‑to‑day settlement, effectively blocking full‑reserve stablecoins from anchoring themselves to central bank liquidity.
Related: China’s PBOC Reaffirms Crackdown on Crypto Trading and Illegal Stablecoin Usage
Meanwhile, the GENIUS Act has set the foundation for a more positive environment in the United States. It broadened the range of assets available for reserves and pushed for stablecoin expansion to support dollar dominance and demand for Treasury securities.
Still, the Federal Reserve maintains tight control over access to settlement systems, and proposed policy changes only introduce simplified, non‑interest‑bearing accounts with strict caps.
The Riksbank added that this parallel direction in regulatory design indicates an emerging global standard, even as national frameworks differ.
Stability, Competition, and the Risks Ahead
The Swedish report assesses both the advantages and vulnerabilities associated with the rise of stablecoins. The sector has grown from just a few billion dollars in 2020 to more than $270 billion today. While the majority still support crypto‑asset trading, real‑world applications are gaining traction.
Stablecoins now support segments of decentralised finance, cross‑border transfers, and access to foreign currency in places where trust in local monetary institutions is low.
The Riksbank warns that rapid adoption could pressure traditional banking because stablecoins do not rely on deposit insurance or fractional‑reserve models. A large shift from deposits to private digital money could raise funding costs for banks and tighten credit conditions for households and businesses.
Authorities also remain wary of fire‑sale risks if issuers face mass redemption demands, especially when backed by assets sensitive to liquidity shocks.
The central bank also discussed additional concerns in areas such as illicit finance, inconsistent redemption practices, and the potential emergence of multiple privately issued monies that trade at discounts to one another.
Related: Sony Targets 2026 Stablecoin Launch to Power PlayStation Payments
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