New Assets, New Rules: Stablecoins Aren’t Swaps

As crypto continues its march into the mainstream, a few critics have recently voiced their concern of an impending financial crisis, similar to the one that shook the global financial system to its core in 2008.

News of some major banking players exploring lending against clients’ crypto holdings has magnified the parallels between 2008 and 2025. The 2008 crisis, however, was fueled by risky, complex financial products like credit default swaps that were hidden from view and poorly understood. Banks took on too much risk without enough oversight, and when the housing market crashed, the entire system fell apart.

Crypto-backed loans today are different. They’re usually overcollateralized, meaning borrowers have to put up more crypto than they borrow, and the process is more transparent. Banks use clear rules and real-time data to manage the risks. While crypto can be volatile, and stablecoins can on rare occasions 'depeg,' these risks aren’t the same as the hidden leverage and tangled bets that nearly collapsed the global economy in 2008.

Comparing the new stablecoin regulation to the 2000 law that deregulated derivatives also misses the mark. That law removed key guardrails, paving the way for disaster. Today’s regulators are focused on making stablecoins safer by requiring clear reserves and strong consumer protections.

Instead of repeating old comparisons, we should recognize that crypto brings new challenges – and new tools. The goal should be smart, modern rules that keep markets safe without holding back innovation.