Economic Daily published an article titled "Risks and Challenges Coexist in the Global Stablecoin Market"

BlockBeats news, on August 1, the Economic Daily published an article titled "Risks and Challenges Coexist in the Global Stablecoin Market". The article points out that stablecoins are one of the most important cryptocurrencies in the crypto market. They are usually linked to stable assets such as legal tender, so their prices are relatively stable, and they can anchor the value of multiple cryptocurrencies and reduce the volatility of the crypto market.

Although many countries and regions have begun to formulate regulatory frameworks for stablecoins, there are differences in regulatory policies for stablecoins in different countries and regions, which will affect the cross-border flow and use of stablecoins.

The global stablecoin market is experiencing rapid growth. Data shows that the global quarterly transfer volume of stablecoins has increased 17 times in the past four years, reaching $4 trillion in the second quarter of this year. On July 17, 2024 alone, the total transaction volume of the stablecoin market reached $87 billion. Among them, Tether (USDT) ranked first in transaction volume, accounting for 83.3%.

Talking about the reasons for the rapid expansion of the stablecoin market, Zhao Wei, a senior researcher at the OKX Research Institute, a digital asset trading platform, said that stablecoins are one of the most important cryptocurrencies in the crypto market. They are usually linked to stable assets such as legal tender, so their prices are relatively stable. They can anchor the value of multiple cryptocurrencies and reduce the volatility of the crypto market, which is of great significance for balancing and stabilizing the cryptocurrency ecosystem.

In the view of Yu Jianing, co-chairman of the Blockchain Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Blockchain Association, stablecoins combine the convenience of virtual assets with the stability of mainstream financial assets, serve as a value scale for virtual asset transactions, and provide virtual asset investors with an "entry channel" and "safe haven", playing an increasingly important role in the international payment system.

At the same time, challenges and risks coexist. "Although many countries and regions have begun to formulate regulatory frameworks for stablecoins, the regulatory environment is still not unified worldwide. There are differences in regulatory policies for stablecoins in different countries and regions, which will affect the cross-border flow and use of stablecoins." Yu Jianing said that although stablecoins are usually linked to real reserve assets, their market prices are still affected by changes in supply and demand, market sentiment and macroeconomic factors. Some stablecoin projects face the problem of insufficient short-term liquidity, especially when the market fluctuates greatly. It is difficult to maintain its stability. Furthermore, the issuance and operation of stablecoins require a high degree of transparency and trust. Any problems with insufficient reserve assets or opaque operations may cause the market's confidence in stablecoins to be damaged. In addition, stablecoins rely on blockchain technology and smart contracts, and their technical security is crucial. Code vulnerabilities, hacker attacks, and technical failures may lead to the collapse of the stablecoin system or loss of funds.

"Stablecoins are an important tool to maintain the stability of the crypto market, and changes in industry demand are one of the key factors affecting its development." Zhao Wei said that internal competition is also related to the trend of stablecoins. At present, stablecoins present a healthy competition trend with a hundred flowers blooming, which is conducive to investors' analysis and selection. In the future, as the market differentiates and develops, whether various currencies can operate in an orderly manner remains to be seen.