Minsheng Report Highlights Stablecoins’ Inadequacy for Dollar Credit Support

Minsheng Securities has released a report identifying stablecoins as insufficient to reinforce US dollar credit in the short term.

The implications highlight systemic risks attached to stablecoins and their unrecognized status as global reserve assets.

Minsheng Securities Critiques Stablecoin Reserves Amid Dollar Concerns

Minsheng Securities’ report underscores the limitations of stablecoins as viable reserves amidst concerns over the US dollar’s credit status. The primary issues cited include the uncontrollable supply of stablecoins and their lack of global recognition as reserve assets. This analysis follows historical events where stablecoins suffered volatility. There is no evidence of a direct impact resulting from the report on the cryptocurrency market.

In the face of these findings, the report raises concerns about stablecoins’ potential systemic risks. It highlights the instability of stablecoin supply and an inadequate framework to serve as credible reserves. The report indicates that overseas official reserves alone cannot stabilize the dollar, with little substantive global acceptance for stablecoins as reserve assets.

The difference between stablecoins and gold is that…their supply may also become uncontrollable, lacking an objective constraint mechanism; second, they are not globally recognized as reliable reserve assets. — Minsheng Securities, Research Team

While the report highlights significant structural challenges associated with stablecoins, there is little evidence indicating any immediate response from key market stakeholders. No official comments have been made by prominent industry figures or major regulatory bodies regarding the findings. Both the cryptocurrency community and related market indicators maintain stability absent significant fluctuation attributable to this new report.

Stablecoin Oversupply and Recognition Challenges Highlighted

Did you know? Oversupply and lack of global recognition keep stablecoins from securing their status as reserve assets, unlike the stability traditionally attributed to gold. Minsheng Securities suggests focused systemic improvements are needed.

CoinMarketCap reports that Tether USDt (USDT) is currently priced at $1.00, maintaining market dominance of 4.72% with a market cap of $157,622,805,046. The 24-hour trading volume is $51,344,019,137, indicating a 41.90% change. Tether’s price largely maintains stability, showing minimal fluctuations over the past three months.

The Coincu research team suggests that stablecoins face considerable obstacles in securing credibility as reserve assets, without effective governmental oversight or systemic constraints. By aligning global financial policy and improving counterparty transparency, stablecoins might gradually overcome current barriers.