Coin Metrics’ State of the Network: Issue 218
Decoding the Digital Dollar: Unraveling the Risks of Stablecoins
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Decoding the Digital Dollar
Unraveling the Risks of Stablecoins
By: Lucas Nuzzi & Kyle Waters
Last week, 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.
Stablecoins are tokens pegged to fiat currencies (overwhelmingly the US dollar today) that run on public blockchains like Ethereum. They 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.
Source: Coin Metrics Network Data Pro
But 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 our new special insights report, we lay out some of the key fragilities of stablecoins and how we can use on-chain and market data to monitor these risks appropriately.
You can download the full report, Decoding the Digital Dollar: Unraveling the Risks of Stablecoins, below.
Network Data Insights
Summary Metrics
Active addresses on Bitcoin moved 3% higher week-over-week, while Ethereum activity slumped, with active addresses falling 6% WoW to 424K per day. Activity in Curve DAO (CRV) surged after DeFi application Curve suffered an exploit to the tune of tens of millions of dollars worth of crypto assets.
Coin Metrics Updates
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