The Financial Stability Board (FSB) has raised concerns about increasing risks in the crypto sector, emphasizing that links to traditional finance are nearing a critical tipping point. Outgoing Chair Klaas Knot stated that while crypto currently does not pose a systemic risk, this could change soon due to significant entry barriers dropping for retail investors. Notably, crypto ETFs are allowing easier access to digital assets, while the stablecoin market continues to grow, holding substantial amounts of US Treasurys, which strengthens ties with traditional finance. According to recent research, stablecoin inflows are inversely impacting short-term Treasury yields. The total market cap for stablecoins exceeds $251 billion, indicating their deep embedding in financial systems. Knot's remarks highlight the urgent need for close monitoring of these developments as a national framework for stablecoins is also progressing in the U.S. with the introduction of the GENIUS Act, aiming to clarify regulations for dollar-backed digital assets.

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