According to a study by the Federal Reserve of New York, stablecoins add “new vulnerabilities” to the cryptocurrency market and financial stability in general.
The document talks about the growing risks of the mass conversion of “stablecoins” like USDC into fiat against the backdrop of the rapid development of the DeFi sector.
The reverse is also true: forced sales of US Treasury-issued debt instruments could weaken the backing of stablecoins. In particular, these reliable assets have shown significant volatility recently.
The regulator experts have touched upon the situation of a decrease in USDT capitalization by $7 billion amid the collapse of the Terra ecosystem. According to them, part of the funds settled in USDC ($4 billion).
