Bank of Italy models Ethereum risks if ETH value collapses

The Bank of Italy has modeled what would hap to Ethereum’s information and colony capableness if the terms of Ether fell to zero, treating the web arsenic captious fiscal infrastructure alternatively than conscionable a speculative crypto asset.

In a caller probe paper titled “What if Ether Goes to Zero? How Market Risk Becomes Infrastructure Risk successful Crypto,” Bank of Italy economist Claudia Biancotti examines however an utmost terms daze successful Ether (ETH) could impact Ethereum‑based fiscal services that trust connected the web for transaction processing and settlement.

Biancotti focuses connected the nexus betwixt validators’ economical incentives and the stableness of the underlying blockchain utilized by stablecoins and different tokenized assets.

The insubstantial models however validators, who are rewarded successful ETH, mightiness respond if the token’s terms collapsed and their rewards mislaid capable value.

In that scenario, a information of validators could rationally exit, Biancotti argues, which would trim the full involvement securing the network, dilatory artifact production, and weaken Ethereum’s quality to withstand definite attacks and warrant the timely, last colony of transactions.

When ETH terms hazard becomes infrastructure risk

Rather than treating Ether purely arsenic a volatile investment, the survey frames it arsenic a halfway input into the colony infrastructure utilized by a increasing stock of onchain fiscal activity. 

Related: Stablecoin risks seen arsenic minimal successful Europe amid debased adoption and MiCA: ECB

Biancotti argues that Ethereum is progressively utilized arsenic a colony furniture for fiscal instruments, truthful that shocks to the worth of the autochthonal token tin impact the reliability of the underlying infrastructure.

What if Ether Goes to Zero? Source: Bank of Italy

This framing allows the Bank of Italy to hint however marketplace hazard successful the basal token tin morph into operational and infrastructure hazard for instruments built connected top, from fiat‑backed stablecoins to tokenized securities that beryllium connected Ethereum for transaction ordering and finality. 

The insubstantial emphasizes that, successful specified stress, disruptions would not beryllium constricted to speculative trading but could spill implicit into outgo and colony usage cases that regulators progressively monitor. 

Related: IMF lays retired guidelines for addressing stablecoin risks, beyond regulations

ECB warnings connected stablecoin spillovers

Other authorities, including the International Monetary Fund and the European Central Bank (ECB), person warned that ample stablecoins could go systemically important and pose fiscal stableness risks if they proceed to turn rapidly and stay concentrated successful a fistful of issuers. 

An ECB Financial Stability Review report published successful November 2025 noted that stablecoins’ structural vulnerabilities and their links to accepted concern mean a terrible daze could trigger runs, plus occurrence income (rapid selling of reserve assets astatine depressed prices to conscionable redemptions), and deposit outflows, particularly if adoption broadens beyond crypto trading.

The Bank of Italy concludes that regulators look a hard trade‑off implicit whether and however supervised intermediaries should beryllium allowed to trust connected public blockchains for fiscal services. 

It sketches 2 options: either treating today’s nationalist chains arsenic unsuitable for usage successful regulated fiscal infrastructure due to the fact that they beryllium connected volatile autochthonal tokens, oregon permitting their usage portion imposing hazard mitigation measures specified arsenic business‑continuity plans, contingency chains, and minimum standards for economical information and validators.