Digital euro
The Eurosystem is preparing for the potential issuance of a digital euro to complement physical cash.
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Civil war declaration: On April 14th and 15th, 2012 Federal Republic of Germany "_urkenstaats"s parliament, Deutscher Bundestag, received a antifiscal written civil war declaration by Federal Republic of Germany "Rechtsstaat"s electronic resistance for human rights even though the "Widerstandsfall" according to article 20 paragraph 4 of the constitution, the "Grundgesetz", had been already declared in the years 2001-03. more
THE ECB BLOG
27 March 2026
Digital euro: an opportunity for banks
The digital euro can be a springboard for bank digitalisation, write Executive Board members Piero Cipollone and Frank Elderson. It strengthens Europe’s sovereignty while helping banks modernise, compete with non-banks and remain profitable.
Read the blog post
SPEECH
26 March 2026
Strengthening European resilience
Deeper integration is key to Europe’s growth and stability, Vice-President Luis de Guindos says at the Ragnar Nurkse Memorial Lecture. We need to complete the Single Market, build a savings and investments union, secure technological sovereignty and simplify banking rules.
Read the Vice-President's speech
THE ECB BLOG
21 March 2026
From Grexit to Grecovery
After a decade of Greek recovery, questions remain: Are banks strong enough to support the economy? What can be done to close the gap in living standards? This post explores Greece’s achievements, challenges and lessons on the path from crisis to recovery, and towards resilience.
Read The ECB Blog- 27 March 2026
- PRESS RELEASE
- 26 March 2026
- MONETARY DEVELOPMENTS IN THE EURO AREAAnnexes
- 26 March 2026
- MONETARY DEVELOPMENTS IN THE EURO AREA
- 24 March 2026
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 24 March 2026
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 24 March 2026
- PRESS RELEASE
- 23 March 2026
- PRESS RELEASE
- 27 March 2026
- Slides by Isabel Schnabel, Member of the Executive Board of the European Central Bank, at Department of Economics at University of Zurich in Zurich, Switzerland
- 26 March 2026
- Speech by Luis de Guindos, Vice-President of the ECB, at the Ragnar Nurkse Memorial Lecture organised by Eesti Pank
- 25 March 2026
- Slides by Philip R. Lane, Member of the Executive Board of the ECB, at The ECB and Its Watchers XXVI, in Frankfurt, Germany
- 25 March 2026
- Keynote speech by Christine Lagarde, President of the ECB, at “The ECB and Its Watchers” conference organised by the Institute for Monetary and Financial Stability at Goethe University Frankfurt
- 24 March 2026
- Introductory statement by Piero Cipollone, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European ParliamentEnglishOTHER LANGUAGES (16) +
- 23 March 2026
- Interview with Luis de Guindos, Vice-President of the ECB, conducted by Carlos Segovia on 20 March 2026
- 8 March 2026
- Interview with Christine Lagarde, President of the ECB, conducted by Benedetta Poletti on 12 February 2026
- 3 March 2026
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Olaf Storbeck on 26 February 2026
- 21 February 2026
- Interview with Christine Lagarde, President of the ECB, conducted by Emma Tucker, Chelsey Dulaney, Greg Ip, Nick Timiraos, Daniel Colarusso and Amol Sharma on 19 February 2026
- 19 February 2026
- Interview with Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Laura Noonan and Nick Comfort on 17 February 2026
- 27 March 2026
- The digital euro is a strategic investment in European autonomy, monetary sovereignty and financial resilience. It also serves as a springboard for innovative digitalisation strategies in retail payments and strengthens bank business models in the face of growing competition.Details
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 21 March 2026
- After a decade of Greek recovery, questions remain: Are banks strong enough to support the economy? What can be done to close the gap in living standards? This post explores Greece’s achievements, challenges and lessons on the path from crisis to recovery, and towards resilience.Details
- JEL Code
- E02 : Macroeconomics and Monetary Economics→General→Institutions and the Macroeconomy
G20 : Financial Economics→Financial Institutions and Services→General
O10 : Economic Development, Technological Change, and Growth→Economic Development→General
- 12 March 2026
- As payments and financial markets go digital, central bank money must evolve too. The Eurosystem is working with market participants to ensure that tokenised finance can settle safely in central bank money, supporting innovation, integration and Europe’s financial sovereignty.EnglishOTHER LANGUAGES (18) +Details
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
D53 : Microeconomics→General Equilibrium and Disequilibrium→Financial Markets
- 10 March 2026
- Healthy oceans are vital for our economies. Stopping marine degradation would protect industries like fishing and tourism, while also helping to combat climate change. The ECB Blog discusses the action that needs to be taken and why these challenges matter to central banks.Details
- JEL Code
- E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
Q50 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→General
- 9 March 2026
- Euro area unemployment is near record lows and set to fall further. Yet wage growth is projected to moderate. Paradox? Not if you look beyond unemployment – immigration, participation, job switching and firms’ hiring intentions are all part of the story.Details
- JEL Code
- J20 : Labor and Demographic Economics→Demand and Supply of Labor→General
J30 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs→General
J60 : Labor and Demographic Economics→Mobility, Unemployment, Vacancies, and Immigrant Workers→General
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
- 27 March 2026
- WORKING PAPER SERIES - No. 3210Details
- Abstract
- Banks use synthetic risk transfers (SRTs) to offload potential losses in their loan portfolios to non-bank investors while retaining the loans on their balance sheets. We investigate this trillion-euro market using transaction-level data from the euro area, the largest SRT market, and highlight three channels of potential risks to financial stability. First, we show that banks synthetically transfer loans that are capital-expensive relative to their riskiness. To establish causality, we exploit a regulation that causes a jump in the risk weights of loans without affecting their riskiness. As banks redeploy the freed capital, their loan portfolios become riskier relative to their capitalization. Second, after entering an SRT, banks reduce their monitoring efforts compared to other banks lending to the same firm. The reduction in monitoring is greater the larger the share of their firm exposure that banks synthetically transfer. Third, banks and non-bank investors are interconnected. Banks are more likely to sell SRTs to investors with whom they already have credit relationship.
- JEL Code
- G20 : Financial Economics→Financial Institutions and Services→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 27 March 2026
- WORKING PAPER SERIES - No. 3209Details
- Abstract
- We show that losses on banks’ securities portfolios matter for the transmission mechanism of monetary policy even in the absence of financial stability concerns. When banks experience losses in their pledgeable securities, their ability to tap liquidity through the interbank market is impaired, and they subsequently reduce illiquid corporate lending, regardless of whether the securities were recorded at market or historical value. These effects are less pronounced for banks with abundant collateral and reserves and for banks that receive liquidity through their group’s internal capital market. Our results highlight a collateral channel in the bank-based transmission of monetary policy.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 26 March 2026
- WORKING PAPER SERIES - No. 3208Details
- Abstract
- Decentralised Finance (DeFi) emerged in 2021 as a fast-growing crypto segment, attracting policymakers’ attention due to its innovative approach of delivering financial services without relying on centralised intermediaries. This paper assesses DeFi governance arrangements for regulating and supervising DeFi using a comprehensive dataset. We find that governance token holders of four protocols (Aave, MakerDAO, Ampleforth, Uniswap) are highly concentrated with around half or more holdings linked to the protocols themselves or exchanges. Top voters are mostly delegates, who, in many cases, could not be identified nor linked to token holders. The study offers insights for policymakers regarding the implementation of policy measures aimed at bringing relevant entities under the regulatory umbrella. The difficulty in identifying holders and voters using public data may make it hard to rely on some of the regulatory anchor points often put forward in the policy debate such as governance token holders, developers or centralised exchanges.
- JEL Code
- G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
- 26 March 2026
- WORKING PAPER SERIES - No. 3207Details
- Abstract
- Conventional credit risk models understate tail risk by centering on mean default probabilities and neglecting distributional and sectoral heterogeneity. We propose a Quantile Probability of Default (QPD) framework based on unconditional quantile regressions estimated on flow default rates from five million non-financial firms across nine countries, conditioned on macro- and sectoral scenario covariates standard in stress testing. The tail exhibits three- to five-fold stronger sensitivity than at the median, revealing non-linearities and asymmetric sectoral propagation of credit risk. We validate the performance of our model across crisis periods and benchmark models to confirm the framework’s robustness and prudential efficiency. Under the European Central Banks’s 2025 increasing geopolitical and trade tensions scenario, the QPD identifies higher tail vulnerabilities in construction, trade, hospitality, and real estate. The framework embeds distributional estimation into stress testing, advancing scenario-based assessment of sectoral credit risk for policy and prudential applications.
- JEL Code
- C21 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Cross-Sectional Models, Spatial Models, Treatment Effect Models, Quantile Regressions
C54 : Mathematical and Quantitative Methods→Econometric Modeling→Quantitative Policy Modeling
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
- 25 March 2026
- WORKING PAPER SERIES - No. 3206Details
- Abstract
- This paper maps the euro-area digital-banking segment and assesses how digital banks transmit monetary policy relative to brick-and-mortar peers. I compile a hand-checked universe of over 170 digital banks (2016–2025) from supervisory data, classifying institutions by business model (e-retail, e-service, e-wholesale). Digital banks are small on average yet growing fast, rely more on household deposits—predominantly overnight—and hold larger cash buffers and intangibles than traditional banks. Using a difference-in-differences design around the ECB tightening cycle that began in July 2022 and the initial 2024 easing. Three results stand out. (i) The funding channel is stronger and faster at digital banks in tightening: household deposit rates rise more and retail-funding spreads compress less, especially at overnight maturities and for stand-alone digital banks. Corporate-funding results are directionally similar but weaker and less robust. (ii) Loan-rate pass-through is not stronger, implying margin compression and a later slowdown in lending growth at digital banks despite continued retail inflows. Household deposits are markedly more rate-sensitive than corporate or unsecured funding. (iii) In early easing, digital banks cut new funding rates relatively quickly —particularly at longer maturities — yet effective deposit premia persist and retail inflows soften while margins begin to normalise. Policy implications concern the interaction of market digital adoption and banks’ capacity to adjust balance-sheet duration through the monetary cycle, along with financial stability.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
O3 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights
- 25 March 2026
- WORKING PAPER SERIES - No. 3205Details
- Abstract
- The smooth functioning of the repo market is essential to financial stability. However, the market has faced repeated episodes of stress in recent years. This paper examines the resilience of the euro-denominated repo market during recent episodes of elevated financial stress, drawing on transaction-level data and applying network analysis. The institutional repo network displays a core–periphery structure, with connectivity intensifying during stress periods. At the sectoral level, trading volumes and repo spreads remain broadly stable. For the euro repo market as a whole, financial stress is associated with lower spreads, consistent with the interpretation that the market functions as a shock absorber.
- JEL Code
- G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 24 March 2026
- WORKING PAPER SERIES - No. 3204Details
- Abstract
- This paper quantifies the role of housing wealth in the transmission of monetary policy to consumption in 20 advanced economies. Using Bayesian VAR models we identify structural shocks with a novel combination of sign and maximum forecast error variance restrictions, isolating the housing wealth channel through counterfactual impulse responses. We find that the housing wealth multiplier — the sensitivity of consumption to exogenous house price changes — is strongly correlated with outright homeownership rates and is higher for durable consumption. Cross-country differences in the monetary policy transmission to consumption are largely driven by the cash-flow channel.
- JEL Code
- E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 24 March 2026
- WORKING PAPER SERIES - No. 3203Details
- Abstract
- This paper examines the short-term macroeconomic and sectoral effects of extreme weather events in Germany, France, Italy, and Spain. We construct novel indicators of extreme temperature and precipitation based on percentile thresholds of long-run historical distributions and estimate their impact through country-specific structural Bayesian VAR models. The analysis documents sizable and heterogeneous effects on real GDP, HICP, and sectoral activity over a one-year horizon. Temperature extremes primarily affect industrial and energy-related sectors, with Germany exhibiting the strongest vulnerability to heatwaves. Precipitation extremes mainly impact construction and mining, with Spain featuring the largest exposure to floods and droughts. Sectoral composition plays a key role in shaping transmission, with pharmaceuticals, electricity, construction, and mining displaying distinct and recurrent patterns. Given their impact on prices, extreme weather event shocks may exert inflationary pressures without hurting activity, or induce demand-type of effects on the overall economy, with different effects across countries.
- JEL Code
- E23 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Production
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
R11 : Urban, Rural, Regional, Real Estate, and Transportation Economics→General Regional Economics→Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- 24 March 2026
- RESEARCH BULLETIN - No. 141Details
- Abstract
- Our new methodology builds an inter-country input-output table that distinguishes green products from the rest, allowing us to assess vulnerabilities in green value chains. In a multi-country, multi-sector model, our table reveals that a decoupling of green supply chains between a US-centric West and a China-centric East could globally cut trade in green products by up to 20%, lower welfare by up to 3% and raise yearly global greenhouse gas emissions by about 50 million tonnes.
- JEL Code
- C67 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Input?Output Models
F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F18 : International Economics→Trade→Trade and Environment
F51 : International Economics→International Relations, National Security, and International Political Economy→International Conflicts, Negotiations, Sanctions
Q48 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Government Policy
- 23 March 2026
- WORKING PAPER SERIES - No. 3202Details
- Abstract
- This paper provides the first causal estimate of the economic impact of interlinking payment systems across countries. We exploit a new dataset of payment systems interlinking initiatives, which identifies over 2,000 connections, and employ standard gravity methods to estimate their impact on trade flows. Consistent with trade costs theory, we find that inter-connected countries have around 4% higher trade volumes, roughly half the effect of a trade agreement and a quarter of the effect of a common currency area. Our results isolate the average effect on trade, of directly connecting fast payment systems, net of country pairs already accessing the correspondent banking network. The estimated impact is larger for payment systems that allow wholesale transactions, those that link small countries, which, typically, are less connected to the correspondent banking network, and for geographical areas that face high cross-border payment costs. This suggests that the benefits from interlinking are derived from reduced cross-border trade costs. Our findings are causal – proved by parametric and semi-parametric estimators – and robust to numerous additional controls, including exclusion of the largest interlinked country group, the euro area.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
F15 : International Economics→Trade→Economic Integration
F30 : International Economics→International Finance→General
- 23 March 2026
- OCCASIONAL PAPER SERIES - No. 382Details
- Abstract
- This paper provides an overview of analytical work conducted largely in 2025, under their own aegis, by experts from various European central banks and authorities in the field of crypto-asset monitoring and presented at the Crypto-Asset Monitoring Expert Group (CAMEG) 2025 Conference. Currently, risks stemming from crypto-assets and the potential implications for central banking and relevant authorities’ domains remain limited and/or manageable, also given the existing regulatory and oversight frameworks. Nevertheless, the importance of monitoring developments in crypto-assets, raising awareness of the potential risks and fostering analytical preparedness cannot be overstated. This paper offers a brief background of the 2025 activities of CAMEG, which brings together experts from the European System of Central Banks and the European Banking Authority. It also provides abstracts from various CAMEG and non-CAMEG papers and other analytical works presented at the conference held on 30 and 31 October 2025. The conference aimed to take stock of analytical work and data issues in the area of crypto-assets, while fostering European collaboration and monitoring in this field. Finally, this paper outlines the prospective way forward for CAMEG, focusing on gaining greater insight into data and deepening analytical work on interlinkages, crypto-asset adoption and the latest trends.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
- 23 March 2026
- SURVEY OF MONETARY ANALYSTS - AGGREGATE RESULTS
- 19 March 2026
- MACROECONOMIC PROJECTIONS FOR THE EURO AREAEnglishOTHER LANGUAGES (21) +Annexes
- 19 March 2026
- MACROECONOMIC PROJECTIONS FOR THE EURO AREA
- 12 March 2026
- LEGAL ACT
- 10 March 2026
- WORKING PAPER SERIES - No. 3201Details
- Abstract
- We analyze the sources of the pandemic-era inflation surge in the euro area using a Bayesian vector autoregression (BVAR) model. By applying narrative, sign, zero, and inequality restrictions,this study is the first that jointly analyzes the inflationary effects of energy and non-energy supply and policy and non-policy demand factors, including fiscal policy, conventional and unconventional monetary policy. Factoring in that energy price dynamics also responded to aggregate demand conditions, we find that the pandemic-era inflation surge in the euro area was driven by a combination of supply and demand factors. Energy-related supply side constraints, even if less important than often estimated, were a key factor in the run up of inflation. Fiscal and monetary policies were accommodative but not the dominant drivers.
- JEL Code
- C11 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Bayesian Analysis: General
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 10 March 2026
- LEGAL ACT
- 6 March 2026
- LETTERS TO MEPS
- 5 March 2026
- WORKING PAPER SERIES - No. 3200Details
- Abstract
- We introduce a novel methodology, ”parametric tilting,” for incorporating external information into econometric model-based density forecasts. Unlike traditional entropic tilting, which can generate unrealistic or unstable distributions under certain conditions, parametric tilting ensures more reliable and numerically stable results. Our approach leverages the flexibility of the skew-T distribution, which captures key moments of macroeconomic time series, and minimizes the Kullback-Leibler divergence between the target and model-based distributions. This method overcomes limitations of entropic tilting, such as multimodal or degenerate distributions, providing a robust alternative for policymakers and researchers aiming to integrate external views into probabilistic forecasting frameworks.
- JEL Code
- C14 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Semiparametric and Nonparametric Methods: General
C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 3 March 2026
- WORKING PAPER SERIES - No. 3199Details
- Abstract
- This paper studies the effects of stablecoin adoption—crypto-assets designed to maintain a stable value relative to a reference asset—on bank intermediation and the transmission of monetary policy. Using evidence from the rapid expansion of stablecoins combined with confidential granular data on euro area banks and their individual borrowers, we document three main findings. First, stablecoin adoption induces a deposit-substitution mechanism, whereby funds shift from retail bank deposits to digital assets. This reallocation increases banks’ reliance on wholesale funding and can ultimately constrain their intermediation capacity. Second, we show that stablecoins alter the passthrough of policy rates to bank funding costs and lending conditions and potentially weaken the predictability of policy actions. These effects are nonlinear and depend critically on the scale of stablecoin adoption, their design features, and their regulatory treatment. Third, we document a potential risk associated with the growing prevalence of foreign-currency-denominated stablecoins. Their diffusion is likely to increase banks’ reliance on foreign-currency wholesale funding. We show that banks with greater exposure to this source of funding exhibit a weaker loan-supply response to domestic monetary policy shocks, indicating a weakening of monetary policy transmission and a potential erosion of monetary sovereignty.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 3 March 2026
- AMI-SECO REPORT
Interest rates
| Deposit facility | 2.00 % |
| Main refinancing operations (fixed rate) | 2.15 % |
| Marginal lending facility | 2.40 % |
Inflation rate
More on inflationExchange rates
| USD | US dollar | 1.1517 | |
| JPY | Japanese yen | 184.16 | |
| GBP | Pound sterling | 0.86720 | |
| CHF | Swiss franc | 0.9178 |
Financial stability
Our tasks Institutional framework Financial Stability Review Macroprudential policy measuresMarket operations
Open market operations Asset purchase programmes Lendings of holdings under PSPPNOT AN EXPERT? CHECK OUT OUR EXPLAINERS
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