Stablecoins, pegged to the U.S. dollar and backed by reserves, have gained traction following a recent bill that legitimized their use. Their increasing popularity raises concerns about the potential economic impact, as major issuers like Tether and Circle hold significant amounts of U.S. Treasuries. While advocates claim that stablecoins could bolster dollar dominance globally, critics warn of possible financial instability. Notably, transaction volumes have surpassed Visa's, highlighting their efficiency for cross-border transactions and attracting significant investments from major financial entities.
Stablecoins, typically pegged to the U.S. dollar and backed 1:1 to a pool of reserves, have become mainstream in U.S. finance, particularly after a recent bill legitimatizing them.
Transaction volume of stablecoins surpassed Visa in early 2024, indicating their growing adoption in finance and ability to enhance cross-border money transfers with low fees.
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