Financial Stability Board Chair Klaas Knot has sounded the alarm about the potential for crypto assets to disrupt global financial stability, warning that a tipping point could be approaching. While previous concerns were directed towards crypto’s non-systemic nature, recent developments have raised serious red flags. As stablecoin issuers increasingly hold substantial US Treasury holdings, Knot emphasizes the need for close monitoring. 🇺🇸 This comes amid growing worries from European Central Bank officials about the potential risks posed by stablecoins, as their rising values and direct links to traditional financial institutions may fuel instability. Knot stresses the importance of adapting regulatory frameworks in light of the increasing integration between crypto markets and mainstream financial systems, highlighting recent barriers for retail investors being removed through the introduction of crypto ETFs. 📈 Meanwhile, a major development occurred as the US Senate passed legislation to introduce formal rules for stablecoins, with bipartisan support. 💪 This pivotal step toward regulating digital assets may mark a turning point in addressing crypto-related risks.