Economists warn of emerging ‘sovereign-stablecoin nexus’
Researchers model regulatory options as stablecoins become intertwined with core markets
Stablecoins are becoming tightly linked with government bond markets, and may start to reshape the structure of financial markets as well as posing liquidity risks, economists warn in new research.
In a paper published in January, Marco Gross from the International Monetary Fund and Richard Senner, who was at the Swiss National Bank when the paper was published, explore the possible emergence of a “sovereign-stablecoin nexus”. They also propose a model of how regulators could respond.
Stablecoins
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