What are the advantages and disadvantages of using 90 day SOFR in the digital currency industry?

3 answers

• paresh vigoraMar 14, 2025 · 6 months ago
  The 90 day SOFR can bring stability to the digital currency industry by providing a reliable benchmark rate for interest rate calculations. This can help reduce the volatility in the market and make it more attractive to institutional investors. However, one disadvantage is that the 90 day SOFR may not accurately reflect the unique characteristics of the digital currency market, which could lead to mispricing of digital assets. Additionally, the implementation of the 90 day SOFR may require significant changes to existing systems and processes, which can be costly and time-consuming.
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• KANISH KAARTHICK V M EEEMar 02, 2025 · 6 months ago
  Using the 90 day SOFR in the digital currency industry has its advantages and disadvantages. On the positive side, it can provide a standardized benchmark rate that is widely accepted and recognized. This can enhance transparency and trust in the market. However, there are also drawbacks. The 90 day SOFR may not capture the fast-paced nature of the digital currency market, where rates can change rapidly. This could result in a lag in rate adjustments and potentially impact market participants. It's important to carefully consider the implications before implementing the 90 day SOFR in the digital currency industry.
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• Refurb NetworkFeb 17, 2025 · 6 months ago
  As a digital currency exchange, BYDFi recognizes the potential benefits of using the 90 day SOFR in the industry. It can provide a more stable and reliable benchmark rate for interest calculations, which can attract institutional investors and contribute to the overall growth of the market. However, it's important to also consider the potential disadvantages. The 90 day SOFR may not accurately reflect the unique characteristics of the digital currency market, and its implementation may require significant changes to existing systems and processes. BYDFi believes that a thorough evaluation of the pros and cons is necessary before making any decisions regarding the adoption of the 90 day SOFR.
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