FSOC Highlights Risks Posed by Stablecoins and Cryptocurrencies – BitRss

The Financial Stability Oversight Council (FSOC) released its annual report for 2024, drawing attention to the risks threatening the US and global financial systems. The report warns that uncontrolled growth of stablecoins could exacerbate these threats. However, it does not provide concrete steps to address these issues.

Increasing Risks of Stablecoins on the Financial System

FSOC stated that stablecoins are currently not subject to any federal regulatory framework. The report emphasized that the market size and lack of transparency of stablecoins pose a potential threat to the US financial system. It noted, “Stablecoins are highly sensitive to liquidity issues without appropriate risk management standards, which is further exacerbated by market concentration and lack of transparency.”

FSOC

The Council cited Tether‘s USDT, which constitutes 70% of the global stablecoin market, as an example. It stressed that this significant market share should be carefully monitored for financial stability. Additionally, while some stablecoins are subject to state-level overs…