The immediate risk to US dollar stablecoin issuers posed by the failure of US banks acting as custodians for their deposits appears to have receded, but recent developments have highlighted the issuers’ exposure to contagion and counterparty risk, Fitch Ratings says. In January 2023, Fitch stated that stablecoin operators were vulnerable to contagion risks linked to the cryptocurrency ecosystem and highlighted the potential counterparty risks that were flagged by a sudden drop in deposits at Silvergate Bank, a key custodian for crypto entities. Silvergate announced plans to wind down and liquidate in March 2023, ... (full story)