The Bank of Mexico's new stability report flags liquidity, contagion and regu The Bank of Mexico's new stability report flags liquidity, contagion and regu

Bank of Mexico warns fragmented global rules expose stablecoins to stress, arbitrage

2025/12/12 02:20

The Bank of Mexico's new stability report flags liquidity, contagion and regulatory-arbitrage risks as crypto adoption accelerates in Latin America.

Mexico’s central bank warned in a new financial stability report that “stablecoins pose significant potential risks to financial stability,” citing their rapid growth, links to traditional finance and global regulatory gaps that could fuel arbitrage and magnify market stress.

Stablecoins’ heavy reliance on short-term US Treasurys, market concentration with two issuers controlling 86% of the supply and past depegging episodes with stablecoins underscore how vulnerable the sector remains to stress, according to the Banxico report.

Without coordinated international safeguards, mass redemptions or issuer failures could spill into broader funding markets, the central bank warned.  

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BitcoinEthereumNews2025/09/18 22:47