Stablecoins: Growth Potential and Impact on Banking

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