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1. Understanding Stablecoin Risks

What Are Stablecoins?

Stablecoins are digital assets pegged to traditional currencies, like the U.S. dollar, aiming to maintain a stable value.

Potential Risks:

• Depegging: The value may deviate from the pegged currency due to market fluctuations or reserve issues.
• Reserve Transparency: Not all stablecoins provide clear information about their backing reserves.
• Regulatory Changes: Evolving regulations can impact the legality and use of stablecoins.

Mitigation Strategies:

• Choose Reputable Stablecoins: Opt for stablecoins with transparent reserve audits and strong regulatory compliance, like USDC.
• Stay Informed: Keep abreast of regulatory developments affecting digital assets.
• Limit Exposure: Avoid holding excessive amounts in stablecoins; diversify your assets.

2. Custody and Asset Control

Risks:

• Self-Custody Challenges: Managing private keys can be complex and risky.
• Third-Party Custodians: Relying on external services introduces counterparty risk.OneSafe+8Avalanche+8BlackRock+8

Mitigation Strategies:

• Use Trusted Wallets: Employ reputable digital wallets with robust security features.
• Consider Custodial Services: For larger holdings, consider regulated custodial services that offer insurance and compliance support.OneSafe