What Are the Systemic Risks of a Major Stablecoin Failure?

A major stablecoin failure poses systemic risks across the entire cryptocurrency ecosystem. It can lead to mass liquidations on derivatives exchanges, loss of confidence in the broader DeFi and stablecoin space, and potential contagion to traditional finance if the stablecoin is widely used.

It can also trigger a regulatory crackdown, which impacts the entire industry.