A $310 billion market in the crosshairs
Stablecoins have grown to dominate the crypto economy, with Tether and USDC alone accounting for the bulk of the market. These tokens are designed to maintain a one-to-one peg with fiat currency, typically the U.S. dollar, by holding reserves in traditional assets like Treasuries, commercial paper, or cash equivalents. But Lagarde argued that size alone makes them a systemic concern. “When a stablecoin reaches the scale of Tether or USDC, its stability becomes a matter of financial stability,” she said.
The $310 billion figure covers all stablecoins globally. That’s larger than the market capitalization of many national stock exchanges. The two largest, Tether (USDT) and USD Coin (USDC), together represent roughly 80% of that total, according to industry data cited in her presentation.
" Translation: "Pasaran $310 bilion dalam sasaran
Stablecoin telah berkembang untuk menguasai ekonomi kripto, dengan Tether dan USDC sahaja merangkumi sebahagian besar pasaran. Token ini direka untuk mengekalkan patokan satu-ke-satu dengan mata wang fiat, biasanya dolar AS, dengan memegang rizab dalam aset tradisional seperti Perbendaharaan, kertas komersial, atau setara tunai. Tetapi Lagarde berhujah bahawa saiz semata-mata menjadikannya kebimbangan sistemik. “Apabila stablecoin mencapai skala Tether atau USDC, kestabilannya menjadi isu kestabilan kewangan,” katanya.
Angka $310 bilion merangkumi semua stablecoin di peringkat global. Itu lebih besar daripada permodalan pasaran banyak bursa saham negara. Dua yang terbesar, Tether (USDT) dan USD Coin (USDC), bersama-sama mewakili kira-kira 80% daripada jumlah itu, menurut data industri yang dipetik dalam pembentangannya.
" Third paragraph: "How stablecoins could transmit stress
Lagarde’s warning centered on a specific vulnerability: the risk that a sudden rush to redeem stablecoins could force fire sales of the underlying assets. During periods of panic — such as a credit crunch or a crypto crash — holders might dump tokens all at once. To meet redemptions, issuers would have to liquidate large chunks of their reserve portfolios, potentially hammering prices in the Treasury or commercial paper markets.
“The stress doesn’t stay inside crypto,” Lagarde said. “It transmits to the real economy through the very assets meant to back these coins.” She pointed to the May 2022 collapse of TerraUSD’s algorithmic stablecoin as a cautionary tale, though she noted that Tether and USDC are different because they claim to hold actual reserves. Still, she questioned whether those reserves would be sufficient in a coordinated sell-off. “We don’t know how deep the liquidity is until we test it,” she added.
" Translation: "Bagaimana stablecoin boleh menularkan tekanan
Amaran Lagarde berpusat pada satu kelemahan khusus: risiko bahawa desakan menebus stablecoin secara tiba-tiba boleh memaksa jualan paksa aset asas. Semasa tempoh panik — seperti krisis kredit atau kejatuhan kripto — pemegang mungkin membuang token serentak. Untuk memenuhi penebusan, penerbit terpaksa mencairkan sebahagian besar portfolio rizab mereka, berpotensi menekan harga dalam pasaran Perbendaharaan atau kertas komersial.
“Tekanan tidak kekal di dalam kripto,” kata Lagarde. “Ia menular ke ekonomi sebenar melalui aset yang sepatutnya menyokong syiling ini.” Beliau merujuk kepada keruntuhan stablecoin algoritma TerraUSD pada Mei 2022 sebagai kisah peringatan, walaupun beliau menyatakan bahawa Tether dan USDC berbeza kerana mereka mendakwa memegang rizab sebenar. Namun, beliau mempersoalkan sama ada rizab tersebut mencukupi dalam jualan berkoordinasi. “Kita tidak tahu sejauh mana kecairan sehingga kita mengujinya,” tambahnya.
" Fourth paragraph: "Regulatory gaps remain
Despite years of debate, no global framework fully governs stablecoins. The European Union’s Markets in Crypto-Assets (MiCA) regulation, set to take full effect in 2025, imposes reserve and transparency requirements. But Lagarde admitted that enforcement remains uneven. “We have the tools in Europe, but the market is global,” she said. “A stablecoin issued in one jurisdiction can stress a Treasury market in another.”
The ECB president stopped short of calling for an outright ban. Instead, she urged regulators to treat large stablecoins like systemically important financial institutions — subjecting them to capital buffers, stress tests, and disclosure rules similar to those applied to banks. “The size alone justifies the scrutiny,” she said.
Tether and USDC have both faced questions about the composition and quality of their reserves in the past. Tether settled with the New York Attorney General’s office in 2021 over claims it misrepresented its backing. USDC’s issuer, Circle, has pursued a banking charter and publishes monthly attestations, but those reports are not full audits.
" Translation: "Jurang kawal selia masih wujud
Walaupun bertahun-tahun perdebatan, tiada rangka kerja global yang mengawal stablecoin sepenuhnya. Peraturan Pasaran dalam Aset Kripto (MiCA) Kesatuan Eropah, yang akan berkuat kuasa sepenuhnya pada 2025, mengenakan keperluan rizab dan ketelusan. Tetapi Lagarde
