DWF Labs Partner Warns of Systemic Risks Such as Stablecoin Redemption Pressure and Reserve Management

In its latest report, Bitwise disclosed that stablecoin trading volume in 2024 has just surpassed the payment giant Visa. However, DWF Labs Managing Partner Andrei Grachev warned that despite the rapid growth, the widespread adoption of stablecoins poses significant systemic risks, such as redemption pressure and reserve management, especially for algorithmic stablecoins or those not adequately collateralized. Andrei Grachev advocates for a multi-pronged solution, with priority given to real-time on-chain proof of reserves, ideally in the form of short-term U.S. Treasury bills or central bank reserves.