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Stablecoins Reveal Financial System Inefficiencies and Centralization Risks

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Stablecoins expose centralization risks in the financial system, despite their role in improving liquidity and crypto markets. Unlike Bitcoin, which acts as a hedge against inflation, stablecoins depend on centralized entities and fiat reserves. They cut payment costs and boost cross-border flows but risk weakening central bank currencies and deepening inequality. Market concentration and illicit finance concerns remain. Without global regulatory coordination, stablecoins could destabilize the financial system.
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