Stablecoins Could Soon Have to Park Cash at Fed, JPMorgan Says

Regulations to oversee stablecoins may come sooner and be more stringent than previously expected given the recent instability, JPMorgan Chase & Co. strategists Teresa Ho, Alex Roever and Holly Cunningham write in note.

• Commentary from regulatory officials has already suggested that stablecoin issuers should be regulated like banks and hold high quality liquid assets to meet potential liquidity needs
• “We would take it a step further,” the strategists wrote. “As the stablecoin market continues to grow, it would be hard not to see reserves (cash at the Fed) as the primary source of collateral required by stablecoin issuers given ...