According to Cointelegraph, the Financial Stability Board (FSB) warned that the risks of cryptocurrency's association with traditional finance are approaching a critical point. FSB Chairman Klaas Knot stated in Madrid that cryptocurrencies do not yet pose a systemic risk to traditional finance, but this situation may not last long.
Knot pointed out that the entry barrier for retail investors has significantly lowered, especially with the launch of cryptocurrency exchange-traded funds (ETFs). Crypto ETFs allow investors to access digital assets without having to manage private keys or use crypto wallets.
Another point of concern is the stablecoin market. Issuers hold significant amounts of U.S. treasury bonds, increasing the association between cryptocurrencies and traditional finance. According to DefiLlama data, the total market capitalization of stablecoins exceeds $251 billion.
The Bank for International Settlements' research found that inflows of stablecoins reduced the three-month treasury yield by 2-2.5 basis points, while outflows increased it by 6-8 basis points. USDT has the greatest impact on the treasury market.
Knot will step down on June 30, and Bank of England Governor Andrew Bailey will succeed him as FSB Chairman. The U.S. Senate passed the GENIUS Act, aimed at establishing a regulatory framework for dollar-backed digital assets.