Bank of Italy warns ETH price collapse could threaten financial stability

The Bank of Italy has warned that market risks from Ethereum could spill over into infrastructure and financial stability risks in an extreme scenario where the asset's price collapses to zero, Cointelegraph reported. In a research paper, the central bank noted that because validators are compensated in ETH, a sharp price decline could cause some to exit the network. This, in turn, could lead to weakened security, delays in block production, and impaired payment and settlement functions. The report also cautioned that since Ethereum is used as a settlement infrastructure for stablecoins and tokenized assets, any shock could spread to the real-world financial system.