Major European report on crypto-asset stability risks
LBS’s Richard Portes co-chairs landmark European study on stablecoins and systemic risk
London Business School’s Professor Richard Portes, Co-Chair of the European Systemic Risk Board (ESRB) Crypto-Asset Task Force, has played a leading role in a major new report examining the financial stability risks arising from the rapid expansion of crypto-assets, including stablecoins, crypto-investment products, and multi-function groups operating across borders.
Published in October 2025, the ESRB report warns that crypto-assets have entered the financial mainstream at record valuations, spurred in part by pro-crypto policies in the United States aimed at boosting demand for dollar-denominated stablecoins. As the links between the crypto sector and traditional finance deepen, the Board cautions that the risk of contagion is increasing, particularly from stablecoins jointly issued in the EU and third countries, a structure that could amplify instability in periods of market stress.
The report calls for a comprehensive policy response to protect financial stability. This includes enhanced supervisory measures, targeted legal reforms, and strengthened international cooperation to manage cross-border vulnerabilities. It also introduces a formal ESRB Recommendation urging EU authorities to restrict multi-issuer stablecoin schemes unless robust safeguards are in place, with most measures to be implemented by the end of 2026.
Professor Portes’s contribution reflects London Business School’s enduring influence in global financial governance and policy. His work helps shape the European debate on how regulators should respond to the accelerating integration of digital assets into mainstream finance, ensuring that innovation in crypto-assets is matched by rigorous oversight to preserve trust and stability in the financial system.
Read the ESRB press release and full report