The safety of stablecoins in the financial system has been a topic of discussion among experts in the industry. Concerns have been raised, particularly regarding Circle, the company behind USDC, due to their large deposits at the now-closed Silicon Valley Bank. Some have even drawn connections to the failure of Silvergate and Signature Bank in the crypto world. However, Adrienne Harris, Superintendent of the New York state’s financial regulator, refuted these claims and asserted that their demise was not caused by crypto-related activities.
Despite these concerns, the popularity of stablecoins continues to rise. These digital currencies are pegged to a fiat currency, providing the advantages of faster and cheaper transactions, while remaining relatively stable in value. One such stablecoin is Tether, which has recently surpassed $50 billion in circulation.
In light of this, several central banks, including the US Federal Reserve, are developing their own digital currencies. The Fed aims to keep up with the changing financial landscape while ensuring the safety and stability of the financial system.
It remains to be seen whether stablecoins will ultimately pose a threat to the financial system or become a reliable and widely accepted form of currency. As the industry continues to evolve, it is essential to keep an eye on potential risks and weigh them against the benefits.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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