Stablecoin growth

Stablecoin growth can be disruptive for the securities markets, says Fitch report

Stablecoin growth can be disruptive for the securities markets, says one of the ‘Big Three’ credit ratings agencies. A report published by Fitch has called stablecoin growth disruptive, stablecoin related turbulence can transmit shocks to other markets.

Stablecoin growth can be dangerous for Securities markets:

On Monday, the ‘Big Three’ credit agency Fitch Ratings published a report on stablecoins and the growth of these new assets. The report follows a study from Fitch that discusses El Salvador adopting bitcoin (BTC) as legal tender in the country. The latest report explains that stablecoins have grown exponentially and the Fitch report’s authors highlight the growth of the popular stablecoin tether (USDT). The study also mentions Facebook’s reported plans to launch a stablecoin crypto-asset called “Diem.”

“The rapid growth in stablecoins means these securities holdings are already relatively large,” Fitch noted. “Although Tether’s annualized market value growth slowed to 45% in 2Q21, it has risen by 230% since the start of 2021 to 15 October to reach USD68.6 billion,” the rating agency added. This growth and “reserve allocations” could end up becoming a “significant investor group” in the U.S. commercial paper market, the study from Fitch Ratings suggests. Stblecoin will be very beneficial for all of us.

Stablecoin growth
The outlook of Fitch website

Stablecoins could be disruptive for CP markets; for example, owing to run risks. Stablecoin-related turbulence could both affect the CP market itself and transmit shocks to other market participants. Risks could be aggravated if the infrastructure and partners used by stablecoin operators to engage with traditional markets lack a record in the smooth handling of transactions during periods of market stress or volatility. Stablecoin growth can put securities market and commercial markets issues.

Although the risk is involved as there is always in every field. Stablecoin growth will continue and keep threatening the existence of other financial systems. For more content please click here.

About mnmansha

MN Mansha is a cryptocurrency expert, trader, and content writer with extensive experience in covering everything related to digital assets — from price analysis to Blockchain disruption. Mansha authored 100+ stories for and other fintech media outlets and he's actively writing more every day. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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