The Bank of Italy has issued a warning regarding the increasing risks associated with cryptocurrencies, particularly highlighting the volatility of Bitcoin and the rising prevalence of dollar-pegged stablecoins. In its April 2025 Financial Stability Report, the bank expressed concerns that Bitcoin and other crypto assets could jeopardize both investor safety and financial stability as they become more intertwined with the traditional financial system and the real economy. The report specifically notes the trend of non-financial corporations investing in Bitcoin, which exposes them to significant price fluctuations. The Bank of Italy also pointed to stablecoins as potential systemic risks, suggesting that heavy reliance on US government bonds to support these assets could create broader financial vulnerabilities. Any disruptions in the stablecoin market or the underlying bonds could have widespread implications for the global financial system. This report comes in conjunction with remarks from Italy's economy minister, emphasizing the need to strengthen the euro's position against US dollar stablecoins and the significance of developing a Digital Euro.

Source 🔗