"For one, it exposes the market to potential fire sales in the event of a run on a major stablecoin. ... The magnitude of our estimates is likely to be a lower bound of potential fire sale effects, ... and thus likely underestimate the potential for non-linear effects under severe stress. "
Reposted from
Iñaki Aldasoro
Aaaand new paper is out!
“Stablecoins and safe asset prices” with the awesome @rashad-ahmed.bsky.social
Quantifying the effects pf stablecoin flows on Tsy yields with instrumented linear projections, documenting asymmetric effects of inflows vs outflows
www.bis.org/publ/work127...
“Stablecoins and safe asset prices” with the awesome @rashad-ahmed.bsky.social
Quantifying the effects pf stablecoin flows on Tsy yields with instrumented linear projections, documenting asymmetric effects of inflows vs outflows
www.bis.org/publ/work127...
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