Chart of the Day
While fiat-backed stablecoins continue to dominate the market, decentralized stablecoin supply has recently surpassed $10 billion and is gradually encroaching on the share of its centralized counterparts. In terms of percentage growth, Terra’s UST and MakerDAO’s DAI have made great strides in the past three months, with 35% and 25% increase in supply respectively, outpacing USDT, the largest stablecoin by market cap. Stablecoin capitalization is the most direct and intuitive indicator of capital inflows to crypto. Its broad use cases and immense potential, including acting as the conduit and translation layer between the global financial infrastructure and the crypto industry, could be a factor to why regulators are keeping a watchful eye on the space.
Talk of the Town
Stablecoin Perils. U.S. Treasury officials have identified what they believe to be “the most urgent risks” of Tether and other stablecoins, and are discussing launching a formal review by the Financial Stability Oversight Council into whether stablecoins pose a threat to financial stability. According to Bloomberg’s report, the upcoming Treasury report on the risks of stablecoins will set the tone for a new regulatory approach to the crypto industry.