Regulator Inggris Peringatkan Risiko Stablecoin di Tengah Pertumbuhan Crypto
UK Regulator Sounds Alarm on Stablecoin Risks Amid Crypto’s Growing Footprint https://cryptonews.com/news/uk-issues-new-warning-over-stablecoin-market-risks/

Bank of England Warns of Stablecoin Risks Amid Crypto's Growing Footprint

The Bank of England's Financial Policy Committee (FPC) has sounded the alarm on the growing risks posed by the expanding use of stablecoins and unbacked crypto assets. The Committee observed a notable rise in activity within the stablecoin and unbacked crypto markets over the past year.

The FPC's warning highlights concerns over reserve adequacy and systemic threats as crypto gains prominence in financial markets. The Committee focused heavily on the quality and liquidity of reserves backing stablecoins, which are needed to support redemptions at par value, especially during market stress. Reserves that are poorly managed or difficult to liquidate could trigger fire sales, potentially destabilizing core financial markets.

The Committee also flagged the risk of currency substitution, noting that the use of foreign-denominated stablecoins could lead to a decline in the use of local currency, potentially weakening domestic monetary systems. Additionally, the FPC noted that stablecoins are increasingly used beyond crypto settlements, raising new risks for cross-border payments and off-chain settlements.

To address these risks, the FPC emphasized the need for ongoing surveillance and stronger international coordination. The Committee backed the Financial Stability Board's global framework for regulating both stablecoins and unbacked crypto assets.

The warning comes as UK regulators raised concerns about younger investors turning to crypto over more traditional investment vehicles. FCA chief Nikhil Rathi noted that millions of under-35s in the UK have entered the financial market through crypto assets rather than stocks, a trend he sees as risky.

Despite the growing risks, the FPC discussed broader threats to financial stability in an environment shaped by heightened geopolitical tensions and economic uncertainty. The Committee flagged vulnerabilities in market-based finance, including increased leverage among hedge funds and a sharp rise in net gilt repo borrowing, which could worsen any market shock if large positions were unwound quickly.

The FPC's warning underscores the need for increased scrutiny and regulation of the stablecoin market, particularly as it continues to grow and pose systemic risks to financial markets.