IMF Warns on Financial Stability Risks From Stablecoin Market

The $305 billion stablecoin market could threaten traditional lending, hamper monetary policy and trigger a run on some of the world’s safest assets, the International Monetary Fund warned on Tuesday.

Typically pegged to the value of fiat currencies by the backing of liquid assets such as US Treasuries, stablecoins are the less volatile part of the cryptocurrency universe. Still, the sector’s rapid growth and its increasing links to mainstream finance have prompted a succession of warnings from regulators and watchdogs.

“Because stablecoins may be subject to run risk, fire sales of their reserve assets — such as bank cash ...