Stablecoin Infrastructure Risks and Regulatory Responsibility Draw Scrutiny

Stablecoins maintain a 1-to-1 peg with the U.S. dollar through assets such as fiat currency and U.S. Treasury securities, but their safety depends on more than reserves. They also rely on public blockchains, smart contracts, cross-chain bridges and private keys. A failure at any point could disrupt transfers and redemptions and amplify financial stress, meaning regulatory responsibility cannot rest solely with issuers.

The MIT Digital Currency Initiative published research on February 4, 2026, identifying risks involving smart contracts, private keys, cross-chain bridges, oracles, consensus security and network congestion. The U.S. GENIUS Act, signed into law on July 18, 2025, requires each $1 stablecoin to be backed by at least $1 in eligible assets. The authors argued that regulators and industry participants should work together to establish additional technical safeguards.