Reduction in Stablecoin issuance is a negative sign for cryptocurrencies - Morgan Stanley

According to the bank, American regulators are likely to focus their efforts on regulating stablecoins. 

The bank acknowledges that regulators have already started to limit stablecoin products and emphasizes the significance of stablecoin issuance for crypto traders and the DeFi sector as a whole.

Stablecoins are considered a kind of "gold standard" for fixing or supporting tokens in the DeFi space. 

The bank predicts that US regulators will require stablecoin issuers to register and show that they have enough liquid assets to support their stablecoin issuance. The bank's note concludes by pointing out that the success of all stablecoins relies on market trust in the system's ability to maintain stability in value.