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06/14 05:32

Stablecoins are increasing their influence in the

Stablecoins are increasing their influence in the financial sector – experts sound the alarm

The Financial Stability Board (FSB) is increasingly concerned about the expanding influence of cryptocurrencies in global finance, warning that the boundaries between digital assets and traditional markets are blurring faster than expected.

Speaking in Madrid, Claas Knott, who will soon step down as FSB chairman, warned that while cryptocurrencies do not yet pose a threat to the financial system as a whole, that could soon change. With easier retail access through ETFs and increasing exposure from institutional investors, the sector could be approaching a critical threshold.

A major concern is the stablecoin market. Issuers already hold vast reserves of U.S. Treasury bonds, which is strengthening the connection between digital assets and traditional financial instruments. Knott stressed that this developing relationship requires strict regulatory oversight.

Recent research confirms these concerns. A study by the Bank for International Settlements shows that stablecoin flows are already having an impact on short-term government bond yields. Inflows can lower yields by up to 2.5 basis points, while outflows can increase them by up to 8 basis points, highlighting the sector’s growing influence on the market. According to the data, Tether and USDC are the most influential players.

As Knott prepares to step down at the end of June, he leaves behind an ecosystem in transition. Bank of England Governor Andrew Bailey will take over the FSB, just as U.S. lawmakers are moving forward with the GENIUS Act, a bill that would create national rules for stablecoin issuers. If passed, it could help establish the U.S. as a leader in regulated digital finance.

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