THE IMPACT OF STABLECOINS ON GLOBAL FINANCE

Abstract

Stablecoins represent a rapidly growing segment of the cryptocurrency market, aiming to overcome the high volatility of cryptocurrencies. Their primary goal is maintaining a stable value, usually pegged to fiat currencies (e.g., the US dollar), which facilitates their use in international payments, as assets within decentralized finance (DeFi), and as protection against inflation. This article explores blockchain technology, the development of stablecoins, methods of ensuring stability, and the reasons for their popularity among users. Special emphasis is placed on regulation at both the EU and US levels, evaluating the compliance of the most widely used stablecoins within legal frameworks. This research investigates advantages and risks, including their use in criminal activities, legal ambiguities, and potential instability. Quantitative and qualitative methods were utilized, including analysis of market capitalization, stability assurance mechanisms, and regulatory policies. Findings reveal that investors trust stablecoins backed by fiat currency reserves (particularly USD) the most, with Tether (USDT) holding the largest market share, despite its lack of full legislative compliance. The article highlights the key challenges and opportunities stablecoins present to individuals and financial markets.