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bitcoin
Bitcoin (BTC) $ 17,225.09
ethereum
Ethereum (ETH) $ 1,281.59
tether
Tether (USDT) $ 1.00
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BNB (BNB) $ 290.01
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USD Coin (USDC) $ 1.00
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Binance USD (BUSD) $ 0.99956
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matic-network
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Thursday, December 8, 2022
HomeGuidesVolatility of Stablecoins Might Unfold to Conventional Finance

Volatility of Stablecoins Might Unfold to Conventional Finance

The Hong Kong Financial Authority launched a analysis report titled “Assessing Volatility Spillover from Cryptocurrencies to Conventional Monetary Belongings: The Position of Asset-Backed Stablecoins.”

Asset-backed stablecoins play a key function within the crypto ecosystem as they supply steady worth backed by conventional monetary property, the report mentioned. Nonetheless, these stablecoins have comparable liquidity mismatch dangers to cash market funds, which may expose them to fireplace gross sales of reserve property when the crypto ecosystem is unstable, thereby growing the volatility of those reserve property.

In excessive circumstances, the failure of stablecoins or different cryptoassets may result in mass redemptions of asset-backed stablecoins and hearth gross sales of their reserve property, with probably important repercussions for conventional monetary programs.

Because the crypto ecosystem continues to broaden and turn out to be extra uncovered to the monetary sector, the hyperlink between cryptocurrencies and conventional monetary property might turn out to be stronger, probably growing the danger spillovers mentioned above, the report mentioned.

Importantly, the crypto ecosystem stays largely outdoors the attain of regulators, with giant information gaps hindering their evaluation of spillover dangers.

DISCLAIMER: The knowledge offered by WebsCrypto doesn’t signify any funding suggestion. The articles printed on this web site solely signify private opinions and don’t have anything to do with the official place of WebsCrypto.

BitcoinMasterNews

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