The IMF published a report titled "Making Stablecoins Stable" calling out Tether's Bitcoin reserves as a specific vulnerability, arguing that volatile reserve assets increase the risk of a bank-run scenario if backing falls below redemption value. The report warns that all stablecoins — as privately issued digital money — are inherently susceptible to runs and pose risks to monetary and financial stability without proper regulation. The IMF cites the Terraform Labs/UST collapse as precedent and suggests issuers pursue alternative revenue like central bank interest payments on reserves instead of chasing yield with riskier assets. The warning comes amid growing institutional adoption: Trump signed the GENIUS Act into law, and 12 European banks including UniCredit and BNP Paribas are preparing to launch a euro-denominated stablecoin in 2026.

TLDR by @Benthic

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