The Bank of Mexico (Banxico), the country’s central bank, has cautioned that stablecoins could threaten financial stability if their growth continues without coordinated international regulation. In its new financial stability report, Banxico highlighted vulnerabilities tied to stablecoins’ reliance on short-term U.S. Treasury assets, market concentration and divergent regulatory frameworks abroad.
The report — released as part of the bank’s annual exploration of systemic risks — underscores Mexico’s cautious stance toward digital assets, even as other nations advance stablecoin frameworks. Banxico said it will keep a “healthy distance” between its traditional financial system and cryptocurrencies in the absence of a unified global framework.
Core concerns: liquidity, concentration and regulatory gaps
According to Banxico’s findings, stablecoins present several key risks:
Heavy dependence on short-term U.S. Treasuries — Stablecoin issuers have increasingly backed their tokens with short-term U.S. government debt, a dynamic that ties their liquidity profiles closely to another critical segment of global markets. This reliance could amplify stress if market conditions deteriorate unexpectedly.
Market concentration — A small number of stablecoin issuers control a large share of the market (with two major issuers accounting for roughly 86 % of supply), leaving the ecosystem vulnerable to stress or disruption at a few key firms.
Regulatory fragmentation — Banxico noted that differing global rules — such as Europe’s Markets in Crypto-Assets (MiCA) framework and proposed U.S. legislation like the GENIUS Act — could create arbitrage opportunities and magnify stress across jurisdictions due to inconsistent reserve, redemption and depositor-protection requirements.
