FSOC warns stablecoins remain a ‘potential risk’ to financial stability
In its 2024 annual report, the FSOC said that stablecoins are “acutely vulnerable to runs absent appropriate risk management standards.”
Stablecoins’ lack of solid risk management standards exposes them to ongoing risks that could also put financial stability in danger, according to the United States Financial Services Oversight Council (FSOC).
“Stablecoins continue to represent a potential risk to financial stability because they are acutely vulnerable to runs absent appropriate risk management standards,” the FSOC said in its annual report published on Dec. 6.
In line with the council’s views over recent years, the FSOC pointed out that the stablecoin market is “heavily concentrated, with a single firm holding around 70 percent of the sector’s total market value.”
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Author: Ciaran Lyons
