The researchers at Coin Metrics have shared an update, titled, “Decoding the Digital Dollar: Unraveling the Risks of Stablecoins.”
Lucas Nuzzi and Kyle Waters from Coin Metrics have noted that earlier this month, the U.S. House Committee on Financial Services convened “to discuss proposed legislation, including H.R. 4766, or the ‘Clarity for Payment Stablecoins Act of 2023’.”
The ensuing debate between House members and push for legislation in the US underscores that stablecoins—”a once nascent but now mainstream segment of the crypto ecosystem—have garnered significant attention in Washington.”
As explained in the report from Coin Metrics, stablecoins are tokens “pegged to fiat currencies (overwhelmingly the US dollar today) that run on public blockchains like Ethereum.”
The Coin Metrics report also mentioned that stablecoins “have burgeoned into a market exceeding $100 billion with millions of users worldwide.”
Already serving as the backbone of decentralized finance (DeFi) applications and the wider crypto-economy, stablecoins hold “the potential to further permeate everyday financial activities for retail users and institutions alike.”
According to Coin Metrics research, “for this future of digital dollars to materialize, it is essential that policymakers and potential users grasp all of the potential risks associated with stablecoins.”
In their latest special insights report, they lay out “some of the key fragilities of stablecoins and how we can use on-chain and market data to monitor these risks appropriately.”
The report noted:
“Coin Metrics’ holistic suite of network and market data provides a … window into the world of stablecoins. By offering detailed, real-time insights into supplies, transaction volumes, active addresses, transfer values, admin key changes, wallet balances, and more, Coin Metrics equips users with the tools they need to understand and navigate the stablecoin market effectively. Whether it’s for making informed financial decisions, managing risk, conducting research, or developing new products, Coin Metrics’ data serves as a vital resource.”
The report added:
“Stablecoins have quickly emerged as a multi-billion dollar market in the center of the crypto economy with ample opportunity for additional growth. The data presented … can empower users to begin to not only monitor current market conditions but also anticipate potential risks and chart out future trends.”