Stablecoin Market Structure, Risk Profiles and Regulation
Stablecoins have grown into a critical layer of digital financial infrastructure, with market capitalization surpassing $200 billion USD. This report provides a taxonomy of stablecoin designs, classifying them into fiat backed, crypto collateralized, algorithmic, and hybrid models. It also explains how each architecture shapes resilience, governance, and risk. While fiat backed stablecoins such as USDT and USDC continue to dominate, the report highlights the rapid expansion of crypto collateralized and hybrid models, including new yield generating stablecoins that combine on-chain collateral with hedging strategies. Real world stress events, from the Terra/UST collapse to USDC’s depegging during the SVB failure, reveal structural vulnerabilities and the growing interconnectedness between stablecoins and traditional finance. The report also describes the accelerating global push for clearer regulatory frameworks and offers senior risk leaders practical insights into market evolution and risk exposures.