Stablecoins: Growth Potential and Impact on Banking

⚠ The summary and findings below are the editor's working notes, pending verification against the source.

Fed staff analysis of how stablecoin growth could affect bank funding and credit, depending on reserve design.

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Key findings

• Stablecoins backed by commercial-bank deposits or Treasuries have very different effects on credit intermediation.
• A two-tiered / narrow-bank reserve model can preserve credit while supporting stablecoin growth.

Topics: Monetary Policy & Banking · Financial Stability & Systemic Risk · Design & Economics

Cite this

Gordon Y. Liao, John Caramichael (2022). Stablecoins: Growth Potential and Impact on Banking Federal Reserve International Finance Discussion Papers No. 1334.

@techreport{liao2022stablecoinsgrowthbanking,
  title = {Stablecoins: Growth Potential and Impact on Banking},
  author = {Gordon Y. Liao and John Caramichael},
  year = {2022},
  institution = {Board of Governors of the Federal Reserve System},
  howpublished = {Federal Reserve International Finance Discussion Papers No. 1334},
  url = {https://www.federalreserve.gov/econres/ifdp/stablecoins-growth-potential-and-impact-on-banking.htm},
  note = {Indexed by Stablecoin Beat},
}

Indexed by Stablecoin Beat — we link to and summarise sources; we do not host copyrighted full text, and summaries are our own.  ·  All research  ·  Methodology