coindesk.com
A collapse in the price of ether ETH$3,141.01 would damage the Ethereum ecosystem's ability to function as a settlement infrastructure for financial activity, a Bank of Italy economist found.
That would hurt the payment, settlement and tokenized finance systems such as stablecoins and onchain lending services that rely on the blockchain for ordering transactions and confirming asset ownership, Claudia Biancotti wrote in a new research paper.
Biancotti examined how an extreme fall in ETH could affect Ethereum’s functionality rather than treating the network as just another speculative crypto market. She noted that disruptions under stress would hit applications that process billions of dollars worth of transactions each day.
The proof-of-stake blockchain relies on validators, who are paid in ETH, to secure the system. If ether were to lose most or all of its value, Biancotti argues that some validators would, quite rationally, shut down.
That would reduce the amount of stake securing the network, slow block production and weaken Ethereum’s resistance to certain attacks. Transaction finality and reliability could degrade at precisely the moment users rely on the network most.
The paper models this dynamic as a shift from market risk to infrastructure risk. It's a framing that reflects how regulators are increasingly viewing blockchains. Ethereum is no longer just a platform for speculative tokens, but a settlement layer for stablecoins, tokenized securities and other financial instruments.
The analysis echoes warnings from other global institutions.
The European Central Bank and the International Monetary Fund have both cautioned that large stablecoins could become systemically important, especially if issuance remains concentrated and links to traditional finance deepen. A severe shock, they warn, could trigger runs and forced asset sales.
Biancotti stopped short of policy prescriptions, but outlines a difficult choice. Regulators could treat public blockchains as unsuitable for regulated finance because they depend on volatile native tokens. Or they could allow their use while requiring safeguards such as contingency plans, backup settlement arrangements and minimum standards for economic security.
Either way, the paper signals a shift in tone. Ethereum’s token economics are no longer viewed as an internal crypto concern, but a factor with potential implications for financial infrastructure stability.