The growth of stablecoins that are not fully backed by safe assets could trigger a destabilization in short-term credit markets, rating agency Fitch has warned.
In a commentary note, the agency explained that coins that are fully backed by safe assets pose a lesser risk for the financial markets. The agency gives USD Coin (USDC), which is backed by United States dollars on a one-to-one basis held in custody accounts, as an example for fully backed stablecoins but warned that the authorities “may still be concerned if the footprint is potentially global or systemic.”
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