From JPM comes the understatement of the century:
The financial stability risks of stablecoins
The financial stability risks of stablecoinsAmong the more interesting and potentially impactful developments of explosive growth in cryptocurrency markets has been the advent and broadening acceptance of stablecoins. As we have noted in prior work, these tokens form the backbone of offshore trading activity, representing the bulk of turnover in most pairs. Though the market has diversified a bit and has occasionally tilted slightly more towards fiat USD under stress, as a general matter this remains very much the case. The associated inflows have helped the stablecoin market to grow rapidly—though it has slowed some recently, the largest such tokens are now well above $100bn in total market value (Exhibit 1). With that growth, regulatory focus on this market has likely shifted from consumer protection to financial stability, including a recent meeting of the Presidential Working Group and recent comments from Boston Federal Reserve President Rosengren.