Stablecoins could let US firms prioritise some creditors – study
FDIC may be on hook if a bank issues coins before failing, Cleveland Fed researchers say
US firms in financial distress could issue stablecoins to prioritise paying out some creditors over others, a new paper from the Federal Reserve Bank of Cleveland argues.
The working paper, published on October 8, states that, in theory, a firm in financial distress could offload some of its highest-quality assets on to a subsidiary that backs a stablecoin. This could enable the firm to prioritise who gets paid out first in any bankruptcy process. If the firm is a bank, the losses could be pushed
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