Big Tech-Issued Stablecoins Could ‘Amplify Shocks’ to Financial System, Says ECB Exec

Big Tech-Issued Stablecoins Could ‘Amplify Shocks’ to Financial System, Says ECB Exec
Fabio Panetta of the executive board of the European Central Bank (ECB) has described the risk of Big Tech-issued stablecoins to the global financial system.Given the massive footprint of Big Tech firms, the assets backing such stablecoins would increase to the point that traditional banks’ funding becomes more scarce and therefore more expensive, Panetta said in a speech Friday.Banks may therefore resort to more expensive short-term sources of funding, while the increase of deposit holdings under the control of Big Tech would make banks’ deposit base more concentrated.“Without proper regulation, these developments could amplify international shocks and undermine financial resilience…