The Italian Central Bank, which takes a cautious approach to Bitcoin (BTC) and cryptocurrencies, has released a scenario simulating the price of Ethereum (ETH) falling to zero.
The bank’s research indicates that if the price of Ethereum collapses, its role as a payment infrastructure for stablecoins and tokenized assets will also be at risk.
Claudia Biancotti, an economist at the Bank of Italy, argues that Ethereum is increasingly being used as a payment layer for financial instruments, and therefore shocks in the value of the native token could reduce the reliability of the underlying infrastructure.
If the Ethereum price drops to zero, the security risk increases. Staking rewards may decrease, which could lead to validators leaving the network and slower transactions.
According to the Italian central bank, Ethereum relies on staking to keep its network secure. Validators lock ETH to confirm transactions and protect the system. In return, they earn rewards in ETH.
At this point, the bank stated that if ETH were to lose all its value and approach zero, staking rewards would drop by approximately 99%, and many validators might leave the network.
This situation can also lead to negative effects such as slowed block production and weakened resistance to attacks.
*This is not investment advice.
