A professor from Cornell University has warned about the potential effects a collapse of a major stablecoin could have on the U.S. bond market. Eswar Prasad said that if large stablecoins face a collapse, the number of Treasury bonds they would need to sell could disrupt the U.S. Treasuries market, affecting prices.
Cornell Profesor Alerts About Stablecoin Collapse Danger
Eswar Prasad, an economics professor at Cornell University, has warned about the potential damage a bank run on a possible collapse of a major stablecoin could bring to the traditional finance system in the U.S. Although the most recent collapse in the crypto economy did not reach legacy finance structures, Prasad believes stablecoins and their operations present risks in this regard.
In an interview with CNBC, Prasad argued that stablecoins use U.S. treasuries as a backup to maintain the value of the peg. In the case that one of the big stablecoins in the market faces a collapse or a bank run, these organizations wou
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