The Financial Stability Board (FSB) sounds alarming to growing risks from the crypto sector, warning that interlinks with traditional finance are close to a critical threshold.
Speaking to Madrid on Thursday, FSB Chair Klaas Knot Says That while crypto has not yet posted a systematic risk to traditional finances, that status may not last longer. “We can come to a tipping point here,” he said.
Knot noted that the barriers to entry for retail investors “dropped significantly,” especially in Introduction of funds exchanged by Crypto Exchange. Crypto ETFs allow investors to obtain exposure to digital assets without managing private keys, using crypto wallets or navigating exchanges.
Knot added that another place of concern is the Stablecoin market. He noted that those who now hold a large amount of US Treasurys, which adds interlinks between crypto and traditional finances. “That’s a segment that we have to keep track of well,” he added.
Related: Société Générale launched US dollar stablecoin in Ethereum and Solana
Stablecoins have been embedded in financial systems
Stablecoins – Digital assets that are contained in fiat currencies such as the US dollars – are becoming increasingly increasing in financial systems. According to Data From Defillma, the total cap of the Stablecoins market is over $ 251 billion.
A recent research Paper Through the Bank for International Settlements analyzed the growing impact of stablecoins on traditional finances, focusing on their influence on the short -term harvests of the US ark.
By using daily data from 2021 to 2025 and an instrumental variable method, the paper found that Stablecoin flowed in the lower three-month ark of the ark of 2-2.5 points basis within 10 days, as the flows raised the yields of 6-8 points basis.
These effects are concentrated in short -term maturity, with little effect on longer bonds. Among those who gave, USDT (USDT) has the greatest effect, followed by the USDC of the Circle (USDC), confirming the influence of stablecoins in the Treasury markets.
KNOT, who serves as president of the Dutch Central Bank, de Nederlandsche Bank, will drop from the same roles on June 30. Bank of England Governor Andrew Bailey is set to succeed him on the FSB, while the Netherlands has not yet appointed a replacement.
Related: Fortune 500 interest in Stablecoins Triple since last year
The US Senate is promoting the Genius Act
On Wednesday, The US Senate voted 68–30 to doadvance The guide and establishment of national innovations for the US Stablecoins, or the Genius Act, a major Stablecoin bill aimed at promoting the clarity of regulation for digital digital assets. The vote gives way to the floor debate and a final vote before the bill moves to the House of Representative.
As a result, the bill will create a national framework for the issuance of Stablecoin, which strengthens the global competition of the US Digital Asset industry.
Magazine: Older investors are at risk for a crypto -funded retirement
