The stablecoin market has expanded to $2.7 trillion in 2025, surpassing transaction volumes of Visa and Mastercard. Despite this growth, stablecoins face significant risks, including de-pegging, regulatory challenges, and threats to monetary sovereignty. Notable incidents such as the 2023 USDC de-pegging and the 2024 USDe collapse highlight these vulnerabilities. Global regulators, including the Bank for International Settlements (BIS), have expressed concerns about the impact of stablecoins on financial stability and monetary policy. Additional risks include the potential for capital flight in emerging markets, fake stablecoin fraud, and the undermining of central bank digital currencies (CBDCs). The systemic risks posed by algorithmic stablecoins, exemplified by the 2022 TerraUSD crash, and their use in money laundering and cross-border fraud, further complicate the regulatory landscape.