Stablecoins represent one of the risk areas for the financial system due to possible problems with their conversion to fiat. This is stated in the new stability report. fed.

In this respect, the regulator has placed “stablecoins” in the same category as certain types of money market funds and bonds.

“Fixed coins […] It is backed by assets that may lose value or lose liquidity in times of stress and create redemption risks. The vulnerability could be exacerbated by a lack of transparency about the risk and liquidity of reserve assets. Additionally, the increased use of stablecoins to meet margin requirements when trading with other leveraged cryptocurrencies has the potential to increase demand volatility.”, – it says in the document.

The authors of the report recalled the report compiled by the Financial Markets Working Group under the President of the United States on the risks associated with “stable coins”. Its authors proposed to equate issuers of such tokens with banks. In addition to meeting capital and liquidity requirements, organizations will be overseen at the federal level.

The Fed’s current Financial Stability Report was released amid a sharp divergence from the 1:1 peg of the algorithmic stablecoin TerraUSD (UST) to the US dollar. According to CoinGecko, the rate dropped to $0.66 on the night of May 10 and rose to $0.93 at the time of writing.

With a capitalization of $16.9 billion, the asset ranks 10th in the cryptocurrency rating and fourth among stablecoins with a share of 9.1%.

Previously, the presidency SEC Gary Gensler and Fed Chairman Jerome Powell. Backed by the head of tightening regulations OCC Michael Hsu of the US Treasury.

Recall that Tether CTO Paolo Ardoino warned of the danger of algorithmic stablecoins to the market as their capitalization increases.