Bank of Italy Warns ETH Collapse Could Test Ethereum’s Role in Global Finance

A Bank of Italy economist released a stress‑test scenario suggesting that if Ether (ETH) were to collapse toward zero, it could undermine Ethereum’s network security and its use as a financial settlement infrastructure, potentially affecting stablecoins and decentralized finance built on the chain.

Key Facts:

• The paper “What if Ether Goes to Zero?” models an extreme price collapse and its impact on Ethereum’s validators and operational capacity.

• In the scenario, many network validators might exit due to lack of economic incentive, reducing network security and slowing transaction settlement.

• A weakened base network could ripple into broader financial utilities that depend on Ethereum’s settlement layer—including stablecoins and tokenized assets.

Expert Insight:

While the study is theoretical, it highlights how native‑token price risk can translate into infrastructure risk, drawing attention from global financial regulators.

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