If government spending trends continue, the chances of stablecoin depegs will rise, especially for Euro stablecoins due to illiquid EU government bond markets.
"If this trend continues the chances of a stable coin DPEG will rise as the collateral backing the stable coins will be harder to liquidate in size to honor redemptions This risk is acute in the EU where many government bond markets are illquid And this foreshadows a scenario where a euro stable coin depects because the issuer cannot liquidate the European bonds back in the euro stable coins at a price that's high enough to honor the stable coin redemptions"