⚠️ BIS issues warning: If stablecoin regulation does not keep pace, the global market could be “torn apart”

The Bank for International Settlements (BIS) General Manager Pablo Hernandez de Cos recently said that global coordination on stablecoin regulation is crucial. If rules differ too widely across countries, it may lead to the market being divided, and even to regulatory arbitrage issues.

He pointed out that while stablecoins are developing rapidly, they may also bring a range of potential risks:

- They could weaken the ability of traditional currencies and fiscal policies to exert control
- In extreme cases, they could place pressure on financial market stability
- They could be used for illegal capital flows

In addition, he also mentioned that current mainstream stablecoins such as Tether and USD Coin (USDC), due to friction in the redemption process, in some cases are more like ETF-type assets rather than fully stable currencies.

From a regulatory perspective, if in the future stablecoin issuers are able to tap into deposit insurance or central bank liquidity support mechanisms, the “run on funds” risk in times of market panic would be noticeably reduced. At the same time, if regulators restrict stablecoin interest payments, it could also reduce the incentive for funds to shift from bank deposits to stablecoins.

📊 Behind this is a real trend:
As the stablecoin market continues to expand, it has gradually become an important bridge connecting traditional finance and the crypto market, and the regulatory framework is also accelerating its improvement.

🌱 Here’s a bit of investing “mindset medicine” for everyone:

Every time a new financial form is born,
it goes through three stages: wild growth → rule-building → maturity and development.

People who truly understand the trend,
are often not the ones who enter after the rules are perfected,
but those who do so when the times have just begun to change. 🚀