How Does the Term “Systemically Important” Apply to a Stablecoin?

A stablecoin is deemed "systemically important" when its failure or disruption could pose a risk to the stability of the broader financial system, not just the crypto market. This is usually determined by its large market capitalization, high volume of transactions, and its deep integration into the settlement infrastructure of major exchanges and DeFi protocols.

Regulators would impose stricter capital, liquidity, and oversight requirements on a systemically important stablecoin to mitigate the risk of a failure cascading into the traditional economy.