RE: LeoThread 2026-02-01 19-59

**Since 2016, the Eurodollar system—offshore USD deposits (~$13T peak)—has faced structural decline and liquidity strains.[1]

Key pressures:**

• LIBOR phaseout (2023): Scandals eroded trust; futures transitioned to SOFR (secured, domestic), shrinking unsecured offshore liquidity.[1][2]

• Post-GFC regs (Basel III): Higher capital/reserve needs tightened $ funding; FX basis swaps widened from 2014.[3]

• Rate hikes (2022+): US rates >5% spiked EM debt costs; dollar strength pressured $10T+ non-USD debt.[4]

• Crises (2020 COVID): Funding squeezes hit EMs (e.g., Indonesia); Fed swaps eased but exposed vulnerabilities.[5]

Usage dropped consistently; uninsured risks amplify stress.[6]