In 2025, the global digital economy has reached a critical juncture of profound transformation. As a "bridge" connecting traditional finance and the blockchain ecosystem, stablecoins have grown into a massive market exceeding $271.4 billion by August 2025, becoming indispensable infrastructure for crypto asset trading, cross-border payments, and decentralized finance (DeFi). Fiat-collateralized stablecoins like USDT and USDC, in particular, are widely regarded as "safe havens" in the crypto world due to their price pegging to the U.S. dollar and claims of "1:1 redemption." However, beneath this halo, the lurking risks cannot be ignored. Recently, regulatory policies in major global financial hubs have been implemented intensively: Hong Kong's Stablecoin Ordinance took effect on August 1, 2025; the EU's Markets in Crypto-Assets Regulation (MiCA) entered full implementation; and the U.S. Payment Stablecoin Regulation Act (GENIUS Act) officially came into force on July 18, 2025. This marks the end of the "wild growth" era for stablecoins and ushers in a new phase of global regulation characterized by "compliance, prudence, and transparency."

The Risks of Stablecoins: Hidden Concerns Behind the Halo

The term "stable" in stablecoins is the core of their market appeal but also their greatest illusion. While investors enjoy their convenience, they must remain acutely aware of the multiple risks hidden beneath the surface.

1. Centralization Risk: The Fragile Foundation of Trust
   The operational logic of fiat-collateralized stablecoins (e.g., USDT, USDC) is built on "trust"—trust that the issuer holds sufficient dollar reserves, trust in the robustness of their asset allocation, and trust in the effectiveness of their audit mechanisms. However, this trust is inherently centralized, relying on the self-discipline of private companies and the credibility of external audits rather than technological or mathematical certainty.

   Take USDT, the world's largest stablecoin by market cap, as an example. Its issuer, Tether, has long faced scrutiny due to the opacity of its reserve assets. Although it has shifted to primarily holding U.S. Treasuries, historical data shows it once heavily invested in commercial paper, gold, and even Bitcoin—high-risk assets. Behind this "high-yield" strategy lies potential credit and market volatility risks. In 2021, Tether was fined $41 million by the U.S. Commodity Futures Trading Commission (CFTC) for failing to report massive losses, exposing flaws in its governance and disclosure mechanisms.

   USDC, while marketed as "transparent and compliant," saw 80% of its reserve assets deposited at Silicon Valley Bank (SVB) during the 2023 SVB crisis, causing its price to severely depeg to $0.85. Although it eventually recovered through external bailouts, this incident demonstrated that even the most compliant stablecoin's "1:1 redemption" promise relies on the stability of the traditional financial system, and its risk resilience is severely overestimated.

2. Liquidity and Run Risk: A "Bank Crisis" on the Blockchain
   Another fatal weakness of stablecoins is liquidity and run risk. In traditional banking systems, banks create credit through "maturity mismatch," but this also leads to "bank run" risks. Stablecoins face similar issues: their reserve assets may include illiquid assets, or their redemption mechanisms may have delays.

   Once the market widely doubts an issuer's solvency (e.g., suspecting insufficient reserves or asset depreciation), it can trigger massive redemption requests in a very short time. Due to the transparency of blockchain transactions, this "on-chain run" can quickly spiral into a self-reinforcing panic loop, causing stablecoin prices to plummet and even triggering cascading liquidations across the DeFi ecosystem. The collapse of TerraUSD (UST) in 2022 is a textbook case of algorithmic stablecoins facing liquidity dry-ups under market stress, a lesson that still resonates today.

3. Compliance and Systemic Risk: The Sword of Damocles of Regulation
   Stablecoins' cross-border, 24/7, peer-to-peer nature makes them a natural tool for money laundering, terrorist financing, and capital flight. Their anonymity or pseudo-anonymity facilitates illicit fund flows, posing significant challenges to global financial regulation. Moreover, stablecoins' scale is no longer negligible. By August 2025, the total market cap of global stablecoins reached $270 billion, with USDT and USDC collectively dominating over 80% of the market, forming a "duopoly." This high concentration not only exacerbates "too big to fail" risks but also means that if a leading stablecoin fails, the shockwaves could ripple through the entire crypto market and even the traditional financial system. Federal Reserve Chair Jerome Powell has repeatedly warned that large stablecoins could threaten financial stability.

   Therefore, stablecoins are by no means "risk-free assets." Investors must recognize that behind their "stability" lie complex financial operations and potential systemic risks, and they should never be equated with bank deposits or cash.