The Financial institution of Italy modeled what would occur to Ethereum’s safety and settlement capability if the worth of Ether fell to zero, treating the community as crucial monetary infrastructure somewhat than only a speculative crypto asset.
In a brand new analysis paper titled “What if Ether Goes to Zero? How Market Danger Turns into Infrastructure Danger in Crypto,” Financial institution of Italy economist Claudia Biancotti examined how an excessive worth shock in Ether (ETH) might have an effect on Ethereum‑primarily based monetary companies that depend on the community for transaction processing and settlement.
Biancotti targeted on the hyperlink between validators’ financial incentives and the soundness of the underlying blockchain utilized by stablecoins and different tokenized property.
The paper fashions how validators, who’re rewarded in ETH, would possibly reply if the token’s worth collapsed and their rewards misplaced worth.
In that state of affairs, a portion of validators would rationally exit, Biancotti argues, which would cut back the entire stake securing the community, sluggish block manufacturing and weaken Ethereum’s potential to resist sure assaults and assure the well timed, remaining settlement of transactions.
When ETH worth threat turns into infrastructure threat
Moderately than treating Ether purely as a unstable funding, the examine frames it as a core enter into the settlement infrastructure utilized by a rising share of onchain monetary exercise.
Associated: Stablecoin dangers seen as minimal in Europe amid low adoption and MiCA: ECB
Biancotti argues that Ethereum is more and more used as a settlement layer for monetary devices, in order that shocks to the worth of the native token might diminish the reliability of the underlying infrastructure.
This framing permits the Financial institution of Italy to hint how market threat within the base token might morph into operational and infrastructure threat for devices constructed on prime, from fiat‑backed stablecoins to tokenized securities that rely on Ethereum for transaction ordering and finality.
The paper emphasizes that, in such stress, disruptions wouldn’t be restricted to speculative buying and selling, however might spill over into fee and settlement use circumstances that regulators more and more monitor.
Associated: IMF lays out pointers for addressing stablecoin dangers, past laws
ECB warnings on stablecoin spillovers
Different authorities, together with the Worldwide Financial Fund and the European Central Financial institution (ECB), have warned that large stablecoins might turn out to be systemically necessary and pose monetary stability dangers in the event that they proceed to quickly increase and stay concentrated in a handful of issuers.
An ECB Monetary Stability Evaluate report printed in November 2025 famous that stablecoins’ structural vulnerabilities and their hyperlinks to conventional finance imply a extreme shock might set off runs, asset hearth gross sales (speedy promoting of reserve property at depressed costs to satisfy redemptions) and deposit outflows, particularly if adoption broadened past crypto buying and selling.
The Financial institution of Italy concluded that regulators face a tough commerce‑off over whether or not and the way supervised intermediaries needs to be allowed to depend on public blockchains for monetary companies.
It sketches two choices: both treating as we speak’s public chains as unsuitable to be used in regulated monetary infrastructure as a result of they rely on unstable native tokens, or allowing their use whereas imposing threat mitigation measures akin to enterprise‑continuity plans, contingency chains and minimal requirements for financial safety and validators.
