
Stablecoin volatility risk may limit its application in supply chain finance. While designed to maintain stable value, stablecoins can face fluctuations due to market dynamics, regulatory changes, or issuer instability. These risks can disrupt payment reliability and trust in transactions, critical for supply chain operations. For instance, sudden depegging events, like those seen in some stablecoin markets, could delay or destabilize trade financing, impacting liquidity and operational efficiency. Additionally, counterparty risks tied to issuers and lack of uniform regulation further complicate adoption. However, stablecoins offer benefits like faster cross-border payments and lower costs compared to traditional systems. To mitigate volatility risks, supply chain finance applications could require robust due diligence on stablecoin issuers, diversified currency baskets, or integration with decentralized finance protocols for added stability. Despite these challenges, with proper risk management 0 reply
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