IMF paper examines how to make stablecoins more stable
Authors propose ways of reducing run risks without removing incentives for issuance
Stablecoins could become more worthy of their name if they were backed by a higher share of safe assets and if issuers had multiple sources of revenue, according to a working paper published by the International Monetary Fund on April 10.
The authors – Bo Li, Tommaso Mancini-Griffoli, Marcello Miccoli, Brandon Joel Tan and Longmei Zhang – say self-regulation is not enough to limit the risk of a funding run on the assets. “If left to their account, stablecoin issuers will hold a high share of
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