Lehman Crisis Is a Warning Against Stablecoin Fever: MacroScope

Stablecoins present a risk to the financial system analogous to that of money market funds in the Lehman Crisis.

• Everyone in markets has their time for when the Great Financial Crisis started. It was on August 10 in 2007, however, that it struck at the heart of the international financial system — the offshore dollar market — signifying that a domestic decline in US housing had become systemic.

Source: Bloomberg

• Almost exactly 18 years later, stablecoins represent a new type of offshore dollar that could play a similar role as money market funds did in the GFC, causing the crisis to ...