The Financial institution of Italy has modeled what would occur to Ethereum’s safety and settlement capability if the value of Ether fell to zero, treating the community as a essential monetary infrastructure moderately than only a speculative crypto asset.
In a brand new analysis paper titled “What if Ether Goes to Zero? How Market Threat Turns into Infrastructure Threat in Crypto,” Financial institution of Italy economist Claudia Biancotti examines how an excessive worth shock in Ether (ETH) may have an effect on Ethereum‑primarily based monetary companies that depend on the community for transaction processing and settlement.
Biancotti focuses on the hyperlink between validators’ financial incentives and the steadiness of the underlying blockchain utilized by stablecoins and different tokenized belongings.
The paper fashions how validators, who’re rewarded in ETH, would possibly reply if the token’s worth collapses and their rewards lose adequate worth.
In that situation, a portion of validators may rationally exit, Biancotti argues, which would cut back the entire stake securing the community, gradual block manufacturing, and weaken Ethereum’s capability to face up to sure assaults and assure the well timed, remaining settlement of transactions.
When ETH worth threat turns into infrastructure threat
Somewhat than treating Ether purely as a unstable funding, the research 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 can have an effect on the reliability of the underlying infrastructure.
This framing permits the Financial institution of Italy to hint how market threat within the base token can morph into operational and infrastructure threat for devices constructed on high, 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 may spill over into fee and settlement use instances that regulators more and more monitor.
Associated: IMF lays out pointers for addressing stablecoin dangers, past rules
ECB warnings on stablecoin spillovers
Different authorities, together with the Worldwide Financial Fund and the European Central Financial institution (ECB), have warned that enormous stablecoins may change into systemically vital and pose monetary stability dangers in the event that they proceed to develop quickly and stay concentrated in a handful of issuers.
An ECB Monetary Stability Assessment report printed in November 2025 famous that stablecoins’ structural vulnerabilities and their hyperlinks to conventional finance imply a extreme shock may set off runs, asset hearth gross sales (speedy promoting of reserve belongings at depressed costs to fulfill redemptions), and deposit outflows, particularly if adoption broadens past crypto buying and selling.
The Financial institution of Italy concludes that regulators face a troublesome trade-off over whether or not and the way supervised intermediaries ought to be allowed to depend on public blockchains for monetary companies.
It sketches two choices: both treating immediately’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 equivalent to enterprise‑continuity plans, contingency chains, and minimal requirements for financial safety and validators.
