Stablecoins are “incredible breakthroughs on a global scale” that are worrying regulators

The crypto industry has faced a number of regulatory hurdles in the United States, and regulators have so far turned to stablecoins. While regulatory concerns about stablecoins mount, their offering is no less competitive, hitting $ 120 billion this week, according to data from Messaris Ryan Watkins.

The source: Twitter

With the increase in use cases for cryptocurrencies, stablecoins have also seen a wide range of uses in the industry. They are used, for example, as a means of exchange and store of value in the Defi ecosystem, as currency for the transfer of value between exchanges, as collateral for derivatives and even as collateral for cross-border payments. In the second quarter of this year alone, crypto users traded over $ 1.7 trillion, 14 times more than in 2020.

Source: Twitter

Undoubtedly, this increase in value cannot be ignored, especially by the regulators. Stablecoins are one of the few legitimate public blockchain applications that has a trusted market worth trillions of dollars, but this is also a sensitive issue.

How did stablecoins become a trillion dollar market?

According to Watkins, the first thing to do is talk about the U.S. dollar:

“With the USD accounting for about 55% of international transactions, savings and borrowing worldwide, there has been massive structural demand for USD, especially outside of the US financial system.”

Because of the 24/7 availability of the blockchain while providing reliable and cheap services, many financial institutions have moved transactions to it. Now offshore status

is one of the headaches for regulators and stablecoins hooked on something like this.

Watkins claims the size of the offshore market or dollar deposits held outside of the US could exceed $ 57 trillion.

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Source: Twitter In addition, regulators could see stablecoins as an “incredible breakthrough on a global scale” with at least trillions of dollars at stake. The situation could worsen if it is combined with the rising trend towards decentralized stablecoins that regulators cannot control or even restrict.

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