While there are no signs of major stablecoins collapsing, an economics professor at Cornell University says it's something regulators are worried about.
Those kinds of coins have become the backbone of the crypto economy, allowing people to trade in and out of different cryptocurrencies without needing to convert their money to fiat.
But while there are no signs of major stablecoins collapsing, Eswar Prasad, an economics professor at Cornell University, said it's something regulators he's spoken to are worried about because of the impact it could have on traditional financial markets. That's because a potential run on a stablecoin — where large swathes of users look to redeem their digital currency for fiat — would mean the issuer has to sell off the assets in their reserve.
A growing number of voices have warned about the impact that a "run" on stablecoins could have on traditional financial markets.Prasad advises regulators around the world on policy related to cryptocurrencies.
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