$USDC
The market value of stablecoins has increased by 90% since late 2023, surpassing $230 billion. These digital tokens maintain a stable value through backing by reserves.
While their increased use in international transactions bolsters the U.S. dollar's status as a dominant global currency, critics warn that stablecoins could also present systemic risks reminiscent of past financial crises.
During market disruptions, holders of stablecoins may rush to redeem their tokens for cash, forcing issuers to quickly sell their reserve assets. This could create instability in financial markets.
The same thing happened in 2008. At that time, a prime money market fund (MMF) broke its dollar peg due to exposure to the collapsed Lehman Brothers debt. That event led to widespread panic and a broader run on money market funds, disrupting the global financial system.
According to Federal Reserve Governor Lisa D. Cook, the same risks could apply to stablecoins.