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Bank of Italy’s research paper warns that a severe, persistent Ether (ETH) price drop could weaken Ethereum’s ability to settle transactions and protect transaction integrity. The author, Claudia Biancotti of the Directorate General for Information Technology, argues that market risk in an unbacked native token can turn into operational and cyber risk for assets that rely on a permissionless blockchain for settlement. The paper uses ecosystem data as of September 23, 2025.
Biancotti describes Ethereum as a voluntary network where validators participate for profit, not by legal mandate. Validators collect rewards in ETH, while they pay many operating expenses in fiat, including hardware, connectivity, and cybersecurity.
Ethereum also pays validators via fees and maximum extractable value (MEV), and these revenues also come in ETH, which links validator economics to ETH’s dollar price.
The paper outlines a ‘downward price spiral’ in which negative expectations drive selling pressure and encourage validators to exit. Exiting can require unstaking, which deactivates validators.
If enough validators stop operating, the network can keep receiving transactions, but it may stop finalizing them, which leaves assets on-chain but immovable. The author also notes Ethereum’s shift to proof-of-stake in September 2022, which makes staked ETH central to both participation and security.
Beyond settlement slowdowns, the paper ties Ethereum security to the economic cost of attacking consensus. It states that double-spending becomes feasible only when colluding actors control more than 50% of active validation power for a sustained period.
Biancotti estimates Ethereum’s “economic security budget” at about 17 million ETH, valued at over $71 billion at the time of writing, which makes large attacks costly in normal market conditions.
The paper argues that a major ETH price collapse would reduce the dollar cost of acquiring attack capacity and could also shrink the active validator set as operators exit. At the same time, Ethereum hosted over 1.7 million assets with a total capitalization of over $800 billion, concentrated in the largest tokens, and it included two major dollar stablecoins totaling about $140 billion in the snapshot.
Under this setup, attackers could focus on stablecoins and tokenized bonds or equities even if ETH loses most of its value. The paper adds that risks increase when issuers face legal obligations to reimburse token holders at face value despite compromised on-chain records.
Biancotti questions whether market participants could move assets quickly to a safer venue during a settlement-layer crisis. The paper cites the security limits of bridges, the difficulty of coordination in a global decentralized system, and Ethereum’s limit of about 3,600 validator exits per day, which can slow a rapid unwind.
It also cites about $85 billion locked in DeFi protocols, where governance processes can delay emergency decisions and trap collateral. The paper argues that central banks should not support native-token prices to keep infrastructure running. It also highlights the absence of a lender of last resort for on-chain markets.
Instead, it points regulators toward business continuity requirements for issuers of backed assets on permissionless settlement layers, including off-chain ownership databases and a preselected contingency chain for migration. It also discusses screening criteria such as minimum economic security budget levels and validator-set diversification.
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