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Stablecoins are not that stable: what regulatory approach?

finextra.com
 2021-07-30

Stablecoins are one of the newest hot spots on the crypto market. They have the potential to enhance the efficiency of the provision of financial services including payments, and to promote financial inclusion. They might offer a new way to transact and retain value, starting to redefine modern finance. We all have seen their incredible growth in 2020 and 2021 under the DeFi market influence as I described in my former blog. Stablecoins however bear a number of risks that could harm. They are not that stable as is suggested. And think of the systemic risks when stable coins are being used all over the world. Disruptions in the value of a stablecoin could not only have damaging impact on the broader crypto market, but also on the real financial world, unless regulators step in. Main question is: what kind of regulatory oversight would work best without harming innovation?

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