David Staunton
- 13 April 2026
- MACROPRUDENTIAL BULLETIN - ARTICLE - No. 33Details
- Abstract
- Stablecoins denominated in US dollars have attracted considerable attention in the context of their growing influence in US Treasury markets. However, the potential effects of euro-denominated stablecoins on euro area sovereign debt markets have been less explored, partly owing to their currently limited market presence. This article explores how the growth of euro-denominated stablecoins could affect demand for euro area sovereign bonds. By determining the pass-through rate of stablecoin demand to sovereign bond holdings by way of several illustrative examples, we demonstrate how the effect varies based on whether stablecoins are issued by banks or e-money institutions (EMIs), on the composition of stablecoin reserve assets, and on the liquidity management preferences of banks and EMIs. Moreover, the net effect hinges on the sectoral origins of stablecoin inflows, which vary according to what stablecoins are, and will be, used for. We also argue that on the one hand, the deposit requirement for EMIs set out in the European Union’s Markets in Crypto-Assets Regulation (MiCAR) can act as a liquidity buffer during periods of stress, reducing the likelihood of immediate sales of other reserve assets, on the other hand it could also transmit stress arising from a stablecoin run to the banking system.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
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
- 13 April 2026
- MACROPRUDENTIAL BULLETIN - ARTICLE - No. 33Details
- Abstract
- The market for tokenised money market funds (TMMFs) – money market funds (MMFs) whose shares are issued as tokens on distributed ledgers – remains small but is expanding rapidly. This article explores the specific design features of TMMFs, including the tokenisation of their underlying assets, liabilities and operational processes. It analyses key economic differences between TMMFs and traditional MMFs, with a particular focus on their implications for financial stability. Tokenisation has the potential to enhance efficiency by enabling faster settlement together with near-24/7 availability and programmability, while unlocking new use cases, such as employing TMMF tokens as collateral. However, TMMFs could also amplify risks related to liquidity mismatches and operational fragilities. A dedicated box in this article compares TMMFs with stablecoins, assessing their financial stability implications and interlinkages. Ultimately, the net financial stability impact of TMMFs will depend on how the market evolves, how it will affect prevailing business models and how it will integrate and interact with traditional financial markets.
- JEL Code
- 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
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
- 3 August 2022
- OCCASIONAL PAPER SERIES - No. 299Details
- Abstract
- If the responses of wages – both private and public – and of pensions to an increase in inflation lead to second-round effects, this can make an inflationary shock more persistent, especially in the presence of automatic wage and pension indexation. This occasional paper presents an overview of the indexation schemes and other mechanisms for setting public wages and pensions across the euro area countries. It concludes that price indexation of public wages is relatively limited in the euro area, while public pensions are overwhelmingly automatically indexed, either fully or partially, to prices and wages.
- JEL Code
- E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
J3 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs
H55 : Public Economics→National Government Expenditures and Related Policies→Social Security and Public Pensions
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation