The post Stablecoins: Alarming Risks To Global Financial Stability Warned By BIS appeared on BitcoinEthereumNews.com.

The world of digital finance is evolving at an unprecedented pace, with stablecoins emerging as a cornerstone of the cryptocurrency ecosystem. These digital tokens, designed to maintain a stable value by being pegged to a reserve asset like the U.S. dollar, have seen their market value explode, doubling to an astounding $255 billion since 2023. With over 90% of this market tied to U.S. dollar-pegged tokens, their integration into the broader financial landscape is undeniable. However, this rapid expansion hasn’t gone unnoticed by global financial watchdogs. The Bank for International Settlements (BIS), often referred to as the ‘central bank for central banks,’ has issued a potent warning: the burgeoning stablecoins market could be creating significant risks to financial stability and even monetary sovereignty. The Unstoppable Rise of Stablecoins: A Double-Edged Sword? Stablecoins were initially conceived to bridge the gap between volatile cryptocurrencies and traditional fiat currencies, offering a stable medium for transactions within the crypto space. Their appeal is clear: they facilitate fast, low-cost international payments, enable participation in decentralized finance (DeFi), and provide a safe haven during crypto market volatility. This utility has fueled their meteoric rise, making them a critical component for many crypto users and institutions alike. Yet, the very factors contributing to their success also present inherent vulnerabilities. The BIS, in its latest bulletin, highlights several pressing concerns that necessitate a closer look at these seemingly innocuous digital assets. While they offer innovation, their rapid proliferation without adequate safeguards raises eyebrows in established financial circles. Why is the BIS Warning About Stablecoins Now? The BIS warning isn’t just a casual observation; it’s a detailed analysis of potential systemic issues. The institution points to several critical areas where stablecoins currently fall short of traditional financial standards, potentially creating avenues for instability: Lack of Basic Consumer Protections: Unlike…

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Filed under: News - @ July 12, 2025 2:29 pm