Run risk is the risk that many stablecoin holders seek to redeem or sell at the same time because they fear that waiting could leave them with a lower-value or less-liquid claim.
Stablecoin runs can involve direct redemption with an issuer, sales in secondary markets, or both. Expectations can become self-reinforcing when holders believe reserves may be insufficient, illiquid, or costly to liquidate. Large redemptions can force asset sales, increase price pressure, and weaken confidence further. The structure resembles run dynamics in other short-term money-like liabilities, although stablecoin redemption and market arrangements differ from bank deposits and money market funds.
Run risk concerns coordinated exit behavior. Liquidity risk concerns the ability of the issuer, market, or reserve portfolio to meet those flows at acceptable cost and speed.
Run dynamics can turn an information shock into rapid redemption pressure and secondary-market discounts.
News questioning reserve quality can cause holders to redeem or sell before others if they expect the stablecoin's convertibility to weaken.