As centralized US dollar-pegged stablecoins continue to gain popularity, the potential for regulatory capture has grown.
The potential risks of overcollateralized stablecoins have recently come into sharper focus. Michael Egorov, the founder of the decentralized borrowing and lending platform Curve Finance, explained that these risks are not necessarily the reserve-related risks commonly noted by investors, but geopolitical risks posed by government regulation.
In an interview with Cointelegraph, Egorov argued that the underlying assets backing collateralized stablecoins, including cash deposits in financial institutions and government securities, such as United States Treasury bills, are vulnerable to asset freezes and seizures.
United States Senator Bill Hagerty’s bill proposal to regulate stablecoins in the US. Source: US Senate
