Bank of Italy Warns of Ethereum’s Potential Collapse Impact

3 mins mins

Key Points:

The Bank of Italy warns of Ethereum’s collapse implications.
A zero price could affect the network and financial services.
Regulators are urged to assess blockchain reliance risks.

The Bank of Italy highlighted on January 12th that an Ethereum price crash to zero could destabilize financial services reliant on its network, like stablecoins and tokenized assets.

Regulators are advised to evaluate allowing public blockchain use or implementing risk mitigations, due to potential validator exits and network security concerns.

Ethereum’s Collapse: Security and Infrastructure Concerns

The report underscores significant risks to Ethereum-based financial services, emphasizing the need for regulators to weigh dependency on public blockchains. This analysis comes as Ethereum serves as a backbone for various decentralized applications and financial instruments. Claudia Biancotti stated, “Regulators must weigh allowing financial institutions to use public blockchains or impose mitigations like business continuity plans, contingency chains, and validator security standards.”

The report examines the severe consequences for Ethereum’s network if its price plummets to zero. Such a scenario could lead to validator exits, reduced block production, and compromised network security. The study urges regulators to assess the reliance of financial institutions on public blockchain systems, focusing on infrastructure risk.

remain limited, with no significant statements from cryptocurrency project leaders or influencers at this time. However, the report’s implications integrate into broader conversations about stablecoin and blockchain vulnerabilities, raising concerns among industry observers.

The Bank of Italy report

Did you know? Ethereum’s price has previously seen significant declines, such as the 94% drop from its peak during the 2018 bear market, underscoring the potential volatility that public blockchains can encounter.

Ethereum (ETH) currently trades at $3,094.97, with a market cap of $373.55 billion and a market dominance of 12.04%, according to CoinMarketCap. The network’s 24-hour trading volume increased by 136.73% to $20.52 billion. Notably, Ethereum’s price fell 0.78% over the past 24 hours, 2.91% in seven days, and experienced a significant 24.64% drop in the last 90 days. These figures highlight Ethereum’s price volatility and the uncertain landscape facing cryptocurrency markets.

ethereum-daily-chart-2458 — Ethereum(ETH), daily chart, screenshot on CoinMarketCap at 17:42 UTC on January 12, 2026. *Source: CoinMarketCap*

Insights from the Coincu research team indicate that further regulatory scrutiny may arise from this report. Experts recommend strengthening blockchain security measures and enhancing transparency in validator operations to safeguard contributions from financial institutions. The impact of Ether valuation on market risks is further explored here.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.