The European central bank has decided to warn everyone about the risk of so-called “stablecoin runs”. In a traditional finance business, banks are responsible to satisfy the customer’s service. During the times when people are rapidly withdrawing their money, the probability of default increases.
The banks said that there are a number of events that are responsible for stablecoin. Major stablecoin runs could also change the “fixed value” of it. In case of that, they will be responsible to cover all the losses customers will have. This will include the exchange rate fluctuations losses too.
If this will happen, the massive negative impact will affect the entire global financial system.
Stablecoin market has been growing rapidly in 2020, if stablecoin will lose its power, this will be a shock to the crypto market. Tether (USDT) is the largest stablecoin on the market right now, it contains over $42 billion trading value on a daily basis. This is twice as big as Bitcoin publishing time.
Continue read: https://cryptodaily.co.uk/2020/09/europes-bank-runs-stablecoins
