Stablecoins: Is the next financial crisis caused by shadow banking?
In this article you will learn:
- Why banks warn of up to $6.6 trillion in deposit outflows due to stablecoins
- Why researchers at the Free University of Berlin classify stablecoins as shadow money and crypto exchanges as shadow banks
- How MiCA and the GENIUS Act regulate stablecoins and why the US wants to use them to secure its dollar hegemony
- What consequences does this have for investors in Bitcoin, Ethereum and stablecoins?
Stablecoins are considered a link between the crypto sphere and the traditional financial system. But their growing importance is causing nervousness among banks and regulators. An estimate by the US Treasury Department assumes that up to $6.6 trillion in bank deposits could flow out if stablecoins are allowed to offer returns on a large scale. While Wall Street warns of systemic risks, researchers at the Free University of Berlin paint an even bleaker picture: stablecoins have long since become “shadow money” and thus part of a new shadow banking system with geopolitical consequences.
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