Stablecoins: Navigating Innovation and Regulation on a Global Scale

Stablecoins, digital assets designed to maintain a stable value, have become essential to the functioning of crypto markets. As of July 2025, roughly $260 billion were in circulation, predominantly dominated by Tether (USDT) and Circle’s USDC. These assets offer crypto investors a way to park funds safely, bridge trades across exchanges, and mitigate volatility but they also draw scrutiny from regulators worldwide.

What Are Stablecoins?

Unlike volatile cryptocurrencies such as Bitcoin, stablecoins are pegged to fiat currencies, most commonly the U.S. dollar. Some rely on cash or liquid assets to back their value, while others use algorithms or trading strategies. Algorithmic stablecoins, however, carry higher risk. These risks are a lesson reinforced by the collapse of TerraUSD and Luna in 2022, which wiped out $60 billion in...

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