Stablecoin issuers pose short-term outflow risk to lenders – study
Research finds crypto assets weaken liquidity coverage ratios
Deposits from stablecoin issuers are a less stable source of funding for banks than standard retail deposits, research from the European Central Bank (ECB) finds.
ECB economist Charles-Enguerrand Coste says that stablecoin issuers’ deposits come with significant short-term outflow risk, even though they only make up a minor share of deposits in the banking sector. This is because they inflate a bank’s balance sheet without providing it with the resources it might use for lending.
Moreover, under a
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