Stablecoins: Market Developments, Risks and Regulation
December 8, 2022
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Stablecoins – a type of crypto asset designed to maintain a stable value – have grown in popularity in recent years.
However, market developments have highlighted the risks that stablecoins can pose for investors, especially when they are not fully backed by high-quality liquid assets. Stablecoins currently pose limited risk to the broader Australian financial system, but this could change as they become more widely used in the future – for example in payments and other financial services. Therefore, regulators around the world are trying to bring more clarity to the regulatory treatment of stablecoins, not only to manage risk but also to support innovation in the market. This article looks at the rise of stablecoins, the risks they pose, and how regulators have responded so far.
Cryptocurrency, Financial Stability, Payments, Regulation, Risk and Uncertainty
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