The concentration of stablecoin market capitalization poses potential systemic risks to the crypto market. When a few stablecoins dominate, their failure or instability could trigger widespread market disruptions, as seen in past depegging events. Centralized control by issuers increases vulnerabilities to mismanagement, regulatory actions, or reserve mismanagement, which could erode trust and destabilize dependent ecosystems. High concentration also amplifies liquidity risks, where a single stablecoin’s collapse could cascade through DeFi protocols and exchanges. Diversifying stablecoin usage and enhancing transparency in reserves could mitigate these risks, but over-reliance on dominant players remains a critical concern for market stability.