@humphran

Stablecoin legislation will likely increase compliance and reserve requirements. New entrants like USAT may face higher costs from third-party audits, regulated custodians, and more conservative reserve allocation. These constraints reduce profit margins and could expose liquidity risks if reserve assets include less-liquid instruments. In stress scenarios, mismatches between redemption demand and asset liquidation speed may trigger instability. While compliance builds credibility, it also narrows operational flexibility compared to legacy stablecoins. Investors should examine reserve composition, redemption policies, and regulatory jurisdiction to assess resilience under liquidity stress or market volatility.

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