A stablecoin collapse could spill into the U.S. bond market and economy, professor warns
Publishing timestamp: 2023-01-13 04:18:12
Summary
Eswar Prasad, economics professor at CornellUniversity, warned that a run on stablecoins could spill into bond markets as issuers of these types of cryptocurrencies may have to sell U.S. Treasurys to honor redemptions. He said that if such a run were to occur when bond market sentiment was "very fragile as it is in U.S. right now," there could be a "multiplier effect" due to large selling pressure on Treasurys. Bill Tai, a venture capitalist and crypto industry veteran, likened the potential stablecoin blowup to the surprise event of the subprime mortgage crisis in 2007.
Sentiment: NEGATIVE
Tickers: BUSD.CM=, USDT.CM=, USDC.CM=,
Keywords: united states, world markets, economic events, u.s. treasury bonds, usd coin/usd, cryptocurrency, bonds, business news, markets, binance usd/usd, tether/usd coin metrics, economy,
Source: https://www.cnbc.com/2023/01/13/a-stablecoin-collapse-could-spill-into-us-bond-market-academic.html