Bloomberg Law
July 23, 2021, 2:27 AM

The Case for Stablecoins Being the New Shadow Banks

Tracy Alloway
Tracy Alloway
Bloomberg News

What keeps breaking the buck, is engaged in financial transformation, and keeps on growing?

The stablecoin market.

The value of the top four stablecoins has surpassed $100 billion in the space of four years, and the coins — which trade on a blockchain but attempt to maintain a one-for-one peg with fiat currencies — now form an integral part of the crypto ecosystem, often acting as the collateral behind DeFi and enabling transfers between crypto exchanges.

But as the market grows, it’s also coming under increased scrutiny in part because it’s still unclear how stablecoin issuers are maintaining their pegs. Most of the criticism ...

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