Stablecoins: crises, geopolitics and policy

15th October 2026 

Key takeaways 

1. Stablecoins are run-optimised money, and the same features that make them useful also allow shocks to become near-instantaneous global runs. 
2. The financial stability problems arising from stablecoins are the familiar Bagehot ones, while the speed is new. 
3. Stablecoins strengthen US geopolitical power while also creating new obligations for the United States. 
4. Stablecoins can bring considerable benefits to hub jurisdictions such as the United Kingdom, Singapore and the UAE. 
5. Most jurisdictions, including Europe, are best served by neither banning nor encouraging stablecoins. 
6. The countries most vulnerable to stablecoins are also those most likely to adopt them. 
7. Banning stablecoins is generally the wrong response. 
8. Stablecoins can become too big to fail, requiring public support in an eventual crisis. 

Teaser 

Stablecoins promise a cheaper, faster payment system. They also reinforce the geopolitical power of the United States, and are run-optimised, which compresses the timescale of a crisis. The financial stability fragilities arising from stablecoins are not new, being fundamentally those Bagehot identified in 1873. What is new is the speed, the cross-border reach and the loss of the public circuit breakers that contain ordinary banking crises. That raises difficult questions about state backstops and whether crisis-response tools can keep up, while a stablecoin crisis may threaten the dollar’s status as reserve currency. Not surprisingly, many jurisdictions have moved to curtail stablecoins. That would be a mistake; there is a better response. 

Introduction 

Stablecoins are private money in token form, designed to trade at par with a reference fiat currency, typically the US dollar. They are issued by private firms, and usually fully backed by high-quality liquid assets (HQLA). 

Stablecoins promise an almost costless payment system in a currency that looks and feels like the US dollar. Although that makes them attractive, frictionless transfers outside government control are a threat, which is why stablecoins remain controversial. 

Advocates see an efficient alternative to existing payment systems, especially for international transactions, and a day-to-day unit of money in countries where domestic currency or payment systems fall short. Critics worry about disintermediation, monetary sovereignty, the erosion of state control, the disruption of government bond markets and the lack of oversight over payments. 

The advantages and the threats are at present hypothetical because stablecoin use is small — around $315 billion in June 2026 (DeFiLlama 2026) — and concentrated as the cash leg of crypto markets, with a smaller role in decentralised finance. However, cross-border transfers in stablecoins are rising, and so is their use as a store of value and a medium for routine transactions. The use of stablecoins could expand rapidly, and most of what follows assumes that this will be the case. 

These concerns form part of a broader challenge for financial authorities outside the United States. Stablecoins combine the efficiency gains of tokenisation with risks to monetary sovereignty, financial stability and domestic credit creation, leaving policymakers to decide how to accommodate the technology without ceding control over money and payments (Dombret and Janse van Rensburg 2025). 

Stablecoins are useful because they reduce friction 

A major attraction of stablecoins is their value to those failed by the existing system. Migrant workers paying high fees, in some cases near 10%, to send money home. Businesses in developing countries unable to send or receive foreign currencies. Citizens in weak-currency countries trying to protect their savings and conduct their daily economic lives. The traditional reaction has typically been dollarisation, using the US dollar for everyday transactions and as a store of wealth, often alongside informal value-transfer networks such as hawala. 

Traditional dollarisation relies on paper dollars, domestic US-dollar deposits, or foreign bank accounts. All are expensive, risky and problematic. Paper money is bulky and hard to secure. Domestic US-dollar deposits can be confiscated or controlled. Access to foreign bank accounts can be restricted. Stablecoins are attractive because they solve those three problems by proxying for dollars that are cheap to acquire, easy to store and quick to transfer, all outside government control and abuse. In effect, they make dollar balances easier to hold and move. This means that stablecoins are most useful to those who most want to hold dollars instead of their own currency. 

Not surprisingly, countries with weak currencies and political or social instability have seen the highest stablecoin adoption. Stablecoin flows already amount to 7.7% of GDP in Latin America and the Caribbean, and 6.7% in Africa and the Middle East (Reuter 2025). At the country level, Turkey stands out, with stablecoin purchases reaching an estimated 4.3% of GDP in 2023/24 (Chainalysis 2024). Similar patterns of stablecoin-mediated dollarisation appear in Argentina, Nigeria, Lebanon and other countries. 

The stock held is still modest — by 2024 stablecoins were 2.7% of total bank deposits in Latin America and the Caribbean, and 1.5% in Africa and the Middle East, against pre-existing foreign-currency deposits of 25% and 20% respectively (Adrian et al. 2025) — but rising fast. In these countries, stablecoins are not the root of the problem, but instead are a response to the problems of holding fiat currency. 

Stablecoin mechanics 

Stablecoins are tokenized financial instruments that exchange at par with a major fiat currency, typically the US dollar. Earlier designs maintained the peg algorithmically, most spectacularly TerraUSD, whose collapse in May 2022 destroyed over $40 billion in value within days. Issuers now typically hold liquid reserves to ensure convertibility. Under the US GENIUS Act of 2025, reserves must sit in cash, bank deposits, short-dated Treasuries, Treasury repo agreements or certain money market funds — i.e. HQLA — and issuers must publicly disclose reserve composition. 

The stablecoin industry can be considered a sequence of layers. At the top sit the issuers themselves, such as Circle and Tether, which mint new tokens on a blockchain and promise holders one-to-one convertibility with the dollar. 

Below the issuers, primary authorised participants redeem or acquire stablecoins into fiat directly from the issuer at, or close to, par. Direct primary access is typically restricted to wholesale use. Primary participants are also subject to terms and compliance requirements and are ultimately constrained by the availability of banking and market infrastructure. 

Further down the chain, secondary markets act as intermediaries between individual stablecoin holders and the primary participants. They span the formal and informal economies — from licensed exchanges subject to local regulation to peer-to-peer markets and informal money changers operating with little or no oversight. Venues typically operate 24/7, allowing near-instantaneous token-to-token and token-fiat swaps under normal market conditions. 

End users either trade via the above intermediaries, or directly on-chain. Governments in countries that are already dollarising find these transactions difficult to monitor and control. 

Stablecoin failure modes 

Stablecoins promise a one-to-one peg with fiat, but that peg is neither guaranteed nor self-executing. Instead, it is continuously produced through arbitrage and the issuers’ interaction with the fiat financial system, implemented via the chain between individual holders and the main stablecoin firms. 

That gives rise to several vulnerabilities. HQLA may of course fall in value, as money market funds demonstrated in 2008. There may be problems in the fiat financial system, or arbitrageurs may step back. Reserves sit in Treasuries and accounts which trade only during business hours and are subject to supply and demand in those markets. 

The stablecoin exchanges, by contrast, operate 24/7. Consequently, when market stress hits, especially outside of business hours, liquidity providers and market makers may reduce risk or withdraw entirely. Spreads widen and, in extreme cases, the peg breaks. Holders of stablecoins then become unable to transact at a meaningful scale without taking severe discounts. In those circumstances, particularly outside business hours, prices will reflect expectations about the fire-sale value of the underlying HQLA and, in the absence of concrete information, rumours suggest bad outcomes. 

If this happens, the stablecoin price stops tracking par. Instead, it reflects liquidity premia, counterparty risk and doubt about whether the issuer will redeem at all — judged on thin information and, often, exaggerated fears. 

Three failure modes matter: an asset problem, a plumbing problem and a belief problem. 

1.    An asset problem emerges when reserves are worth less than liabilities.
2.    A plumbing problem arises if conversion fails even though reserves are adequate, because of internet outages, banking hours, disrupted rails, operational outages, compliance freezes or collateral constraints by intermediaries.
3.    A belief problem can arise, à la Diamond and Dybvig (1983), when everyone runs because they expect everyone else to run. It is, after all, optimal to be first.

These modes interact. A plumbing failure — banking rails down over a weekend — may trigger a belief run, with fire sales that turn a solvent issuer into an insolvent one. Any single failure mode can activate the others, converting liquidity stress into solvency impairment and, in extremis, a financial crisis. Runs can stem from the rails rather than the reserves, and even a stablecoin backed by perfectly safe assets can run (Klee et al. 2026). 

Run characteristics 

While stablecoins are not intentionally designed to facilitate runs, they are designed to reduce frictions, and that facilitates runs. Transfers settle in near real-time, markets operate 24/7, and holders can reallocate globally without geographic or institutional constraints. Four characteristics of stablecoins are central to any analysis of a stablecoin crisis. 

1.    Stablecoin runs are nearly instantaneous, especially on-chain, from one stablecoin to another. This means liquidity can migrate instantly between issuers, in the process transmitting stress well before much obvious interaction with the fiat banking system has taken place.
2.    Stablecoin collateral is generally held in HQLA denominated in the stablecoin’s reference currency, typically US Treasuries. This means that stablecoin stress has the potential to disrupt the traditional financial system, and especially the US Treasury market.
3.    Stablecoin runs are slowed down by their interaction with the fiat banking system, and are therefore constrained by banking hours, compliance checks and payment rails.
4.    Unlike most bank runs, stablecoin runs are cross-border by default. 

Fragilities 

The fundamental fragilities arising from stablecoins are not new. They have always been present in banking systems and were clearly identified by Bagehot (1873). What is new is not just faster settlement, which has also improved in fiat markets, but the removal of gating mechanisms, the additional layer of intermediation, the cross-border aspect, the obscurity, the programmability of liquidation, the compression of coordination time, and the ability of a crisis to play out outside business hours. 

Traditional banking systems rely on public circuit breakers — business hours, deposit insurance, lenders of last resort, supervisory intervention and the ability to suspend convertibility. Stablecoins depend to a much greater extent on private controls designed for operational or compliance risk, but these controls do not constitute an effective crisis-intervention facility. For regulators outside the United States, a further problem is that the locus sits in the United States rather than in their own jurisdiction. 

The speed and form of exit depend on who is running. Retail holders, seeking to convert stablecoins into fiat, are usually the slowest and, in many countries, constrained by identity checks and banking rails. Institutional holders move faster through OTC desks and direct redemption. On-chain algorithmic systems are the fastest of all. 

In the early stages of a run, stablecoin-to-stablecoin transfers are likely, redistributing risk across issuers without affecting system-wide liquidity. Damage only escalates when secondary markets become illiquid and redemptions force the liquidation of reserves. 

Stablecoin runs can in principle be controlled using similar mechanisms to those used in the fiat banking system. But these are unpopular, so in normal times operators have a powerful incentive not to implement them, or to make them difficult to use because any issuer who permits such restrictions will lose business to those that have not. Only a binding regulatory mandate applied to all operators can make these mechanisms a credible defence. Even then, the threat that these constraints may be used creates a pre-emptive incentive to exit before they are imposed. 

For such mechanisms to be effective, the financial authorities will have to invest in substantial prescriptive regulation long before problems emerge, make substantial advance plans for the operations required, and act quickly and decisively when problems emerge. 

Stablecoins can facilitate bank runs as well as currency runs. Traditionally, in a run, depositors either convert their balances into paper fiat or send them to other bank accounts. But in a crisis, as we have often seen, there might be a general distrust of the entire banking system. In that case, a stablecoin that is fully backed by HQLA, in other words short-term government obligations, might be a much more attractive destination for cash coming out of the banking system and so accelerate a traditional bank run. A stablecoin with reserves in a different country might be even more attractive. If stablecoins had been around in the autumn of 2008, that crisis would probably have been more rapid, more severe and more difficult to manage. 

Ultimately, if stablecoins become much bigger than they are now, their reserves will also become large holders of government bonds. Any stablecoin crisis could then disrupt the Treasury market, with material cost consequences for other parts of the system. It would also act as a contagion vector (if stablecoins exist in multiple currencies, or if a stablecoin run coincides with a run on a country) and as a vehicle for flight out of one currency and its government bond market into another. This will disrupt both foreign exchange and government bond markets in both countries. 

Stablecoins and backstops 

Most discussions of stablecoins ignore the question of backstops, except in the special case of treating them as M1 money-like instruments with access to central-bank facilities. By contrast, we see backstops as a core issue, and if stablecoins take off, backstops will become unavoidable. 

History offers many examples of state backstops that were unthinkable until they were not. Bagehot (1873) codified the lender-of-last-resort doctrine after the Overend Gurney collapse. The Panic of 1907 produced the Federal Reserve, and the bank runs of the Great Depression produced the FDIC and deposit insurance. Time and again, crises have turned supposedly private liabilities into public obligations. 

Chwieroth and Walter (2019) argue that bailouts become inevitable through political rather than economic logic. Once an asset is widely held, it becomes a middle-class good, an entitlement that the state is expected to guarantee. Few governments accept the political price of citizens losing access to their savings, or of a preventable financial crisis tipping the economy into recession. 

The consequence is that if and when stablecoin entities become sufficiently enmeshed in day-to-day financial transactions, they become, like banks, too big to fail. In a crisis where stablecoins are widely held, a state backstop will be demanded and likely delivered. 

We have already seen a state backstop for stablecoins in action. When SVB failed in March 2023, USDC de-pegged because Circle, the issuer of USDC, had $3.3 billion on deposit at SVB. The peg was restored only after US authorities invoked a systemic risk exception to guarantee all SVB deposits, including Circle’s. 

How stablecoins affect different countries 

Stablecoins affect different countries very differently. Some are direct beneficiaries — the United States and perhaps international financial centres. For most of the world, stablecoins may not in practice be that relevant, provided that adoption is modest. For developing countries that are already heavily dollarised, stablecoins bring both real benefits and new threats. 

The United States 

The US dollar is overwhelmingly preferred as the par currency for stablecoins for four main reasons: it has been the reserve currency for over a century; it is the settlement currency for most cross-border commerce; it is the most widely recognised, and hence trusted, foreign currency in the world; and it has become the unit of account for crypto markets. 

John Connally, then Treasury Secretary, told European finance ministers in 1971 that the dollar was America’s currency, but their problem. Stablecoins are much the same. They do not cause weak-currency problems, but they reduce the frictions that slow private dollarisation and shift benefits and costs across borders. And they are regulated in accordance with American interests and policy rather than local ones. 

In the words of the current Treasury Secretary, Scott Bessent (2025): 

“Stablecoins represent a revolution in digital finance. The dollar now has an internet-native payment rail that is fast, frictionless, and free of middlemen. This groundbreaking technology will buttress the dollar’s status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for US Treasuries, which back stablecoins. The GENIUS Act provides the fast-growing stablecoin market with the regulatory clarity it needs to grow into a multitrillion-dollar industry. The signing of this bill marks a seminal moment for digital assets and dollar supremacy.” 

Dollar stablecoins benefit the United States in three ways: 

1.    Fiscal: Every additional US dollar stablecoin creates demand for short-dated Treasuries, directly or through the entities that hold them. Where the holders are foreign, this channels overseas savings into US government debt.
2.    Privatised seigniorage: Stablecoin issuers capture the yield on reserve assets and provide the United States with taxes, dividends, employment and technology investment. Their dependence on US-regulated reserves ties global stablecoin activity to the American financial system.
3.    Geopolitical: Dollar stablecoins increase dependence on US-controlled infrastructure, including the requirement to seek its assistance in a future crisis.

Even when a stablecoin issuer is based outside the United States — Tether, the largest issuer, has relocated its headquarters and licensing base to El Salvador — its viability depends on accessing US financial markets, banking relationships, custodians, payment rails and the compliance perimeter shaped by the US Office of Foreign Assets Control. These channels reinforce existing currency hierarchies and the dollar’s reserve-currency role (Aldasoro et al. 2026). 

There are also downsides for the United States. If a major issuer were to break its peg, countries that had dollarised via that issuer would face losses the United States currently has no mechanism to address. The bilateral infrastructure through which dollar crises have historically been managed reaches sovereign counterparties, not retail holders of private tokens. The consequence would be a crisis that propagates through a US dollar-dominated financial instrument which then inevitably results in a demand for the United States to respond in an environment where there is no established mechanism for delivering such a response. If it were to refuse, it might be seen as defaulting on its obligations as the owner of the reserve currency and hence threaten the dollar’s status as such. 

Furthermore, a common characteristic of crises is widespread mistrust of the incumbent banking system, with consequent disintermediation out of bank accounts into paper fiat money. We saw that in the Great Depression and in the GFC in 2008. In a future crisis, depositors may prefer stablecoins backed by short-term government Treasuries. In other words, stablecoins will act as a crisis amplifier, leaving the question of whether current crisis response frameworks would work as intended. 

The US, consequently, may face economic and political consequences if the use of stablecoins becomes widespread, that are different than those now trumpeted by its policymakers. 

For the United States, the calculus is simple. The fiscal, seigniorage and geopolitical benefits accrue now, whereas the one genuine cost — the latent backstop obligation — is contingent and, as March 2023 and other crises have shown, one the United States has both the tools and the political incentive to meet. Against that it needs to weigh the economic and political costs from providing or not providing a backstop in an eventual stablecoin crisis. 

Hub jurisdictions 

Stablecoins are the on-chain analogue of the traditional offshore eurodollar system — private dollar liabilities circulating beyond the US financial system. Both let non-US entities transact in dollars largely without oversight by their own national authorities. The eurodollar market arose because the Soviet Union, accumulating dollar balances from trade but fearing sanctions if it held these balances in US banks, placed them in dollar accounts at European banks. The eurodollar market assisted the re-emergence of London as a global financial centre in the 1960s and 1970s. 

A similar dynamic may play out with stablecoins. Holders who want the dollar as a unit of account but would rather hold it outside the United States make dollar stablecoins issued in hub jurisdictions — major financial centres such as Singapore, Hong Kong, the UAE and the United Kingdom — commercially attractive. These centres benefit by capturing the infrastructure: exchanges, custodians, compliance functions and licensing revenues. 

A notable variant is stablecoins denominated in currencies credibly pegged to the dollar, such as the UAE dirham, which give holders effective dollar exposure entirely outside US control. 

The threats to the hubs are contained. They face no dollarisation pressure because their monetary frameworks are credible. And because their own citizens see little need for stablecoins, and they don’t issue the reserve currency, their bailout exposure appears limited. 

For the hubs, the best policy prescription is to encourage stablecoin activity. Hospitable licensing, clear regulation and competitive tax treatment attract the exchanges, custodians and compliance functions that generate fee revenue and regulatory influence, while their own monetary credibility insulates them from dollarisation pressure. The contingent cost is a bailout the hub might be politically compelled to provide if a domestically licensed issuer failed. 

Most countries — benign neglect 

Most countries are neither seriously threatened by stablecoins nor likely to benefit much from them. Their currencies are credible, their financial infrastructure is sound, no overwhelming pull factors drive adoption, and stablecoin firms will prefer to operate from the United States or hubs. Stablecoin activity that touches their domestic banks, exchanges and payment rails already sits inside their regulatory perimeter and is therefore easily monitored and regulated. 

We may call them the benign-neglect group. The right position is to be at least outwardly friendly to stablecoins. The actual threat to monetary sovereignty seems small, but active hostility or heavy-handed restriction signals risk aversion and technological backwardness, both of which carry their own costs in financial-services competitiveness and innovation. Enforceable KYC and AML rules, restrictions on non-compliant issuers and monitoring on- and off-ramps give the authorities the tools they need, without having to pull stablecoins fully into banking regulation or treat them as a threat. 

Weak-currency countries 

Countries dollarise because their citizens have lost confidence in the local currency, and usually with good reason — high inflation, instability and a weak policy framework. The countries where stablecoin adoption is fastest are therefore also those most at risk of financial crises. 

The underlying problem is not the stablecoin, but the currency it replaces. Dollarisation is the symptom, not the cause. But stablecoins make it worse. When a confidence shock hits, they become the natural conduit for currency flight, bought around the clock through offshore exchanges and held outside the domestic banking system and, often, outside capital controls. The result is faster outflows, sharper exchange-rate pressure and greater strain on reserves. 

The policy levers are less effective with stablecoins than with traditional banking channels. When a crisis hits, countries seek outside assistance — dollar liquidity, help to enforce capital controls and technical support for monitoring flows. Such assistance has historically been slow, operating over weeks or months rather than hours. Stablecoins make that mismatch worse because the crisis moves faster, and much of the relevant infrastructure sits in private companies inside the United States and hub-country regulatory perimeters, where multilateral support mechanisms have little access or leverage. 

The Federal Reserve’s dollar-swap lines, which proved essential for crisis containment in 2008 and 2020, reach only a narrow and discretionary set of central banks. Most do not have access. A large share of high-value cross-border dollar payments settle through CHIPS, a private clearing system with only 42 participating banks, split between domestic and foreign. Banks outside that group must work through those inside it. The threat of being cut off from dollar clearing has been one of the most powerful tools in the US arsenal for enforcing compliance, as the cases of BNP Paribas, Iran and Russia have shown. A country on the receiving end of a stablecoin run has no equivalent leverage. 

Domestic authorities have limited reach. Issuers can freeze wallets and blacklist addresses, but the reasonable expectation is that they will only do so in response to US regulatory or law-enforcement demands. Local jurisdictions can try to regulate on-chain transfers through intermediaries but are unlikely to succeed. While blockchains are publicly visible, they are difficult to monitor when users want to stay under the radar. The best target is the on- and off-ramps where a local entity converts local fiat into or out of stablecoins. 

The countries with the most to lose are thus those where adoption will be the fastest. The same erosion of trust that drives citizens out of the local currency also makes domestic rules easier to ignore, compounding the regulators’ difficulty. 

Their authorities cannot realistically control a sprawling network of unlicensed brokers, peer-to-peer markets and informal money changers outside the formal financial system. They can write whatever rules they like, but if they cannot see the activity, they cannot stop it. 

For these countries, the policy challenge is bigger than choosing whether to permit or restrict stablecoins. Banning is tempting, but unlikely to work. Citizens dollarise in response to policy weakness and are adept at evading regulation. Pushing stablecoin activity underground would further reduce state control by entirely preventing monitoring. 

The durable response is to address the structural conditions that drive adoption in the first place by improving the existing financial system and so weaken the demand for stablecoins. Credible local money, low inflation and payment systems that work are the strongest defence. Brazil’s PIX and India’s UPI offer a template, because instant, cheap domestic payment systems remove one of the main use cases for stablecoins. Regional payment linkages extend the same logic across borders. 

The cost of inaction compounds. If the authorities do not respond, unregulated stablecoin intermediation will outcompete and further undermine the domestic banking system. As retail deposits migrate to stablecoins and fiat transactions lose relevance, the state’s ability to tax economic activity weakens and regulatory oversight thins — pressure that builds until it is resolved, most likely after a crisis. 

Where the underlying fiat currency weakness cannot be repaired quickly, countries and the multilateral organisations that support them should prepare for financial crises amplified by stablecoins. 

Conclusion 

Stablecoins exist because of a demand for stable, accessible, liquid money. But the features that make this money so attractive — 24/7, borderless, low-friction — also make it a run-optimised instrument. This means the expectation of continuous liquidity can reverse abruptly under stress and turn confidence shocks into rapid, self-reinforcing exits. The traditional crisis-fighting infrastructure was built for the slower crises of the past, and that mismatch alone makes a future crisis more likely. 

Despite the scale of the threat posed by stablecoins, we do not see prohibition as likely to be an effective response in most countries, with exceptions such as China. Most countries should monitor stablecoins without, as far as possible, granting them the status or protection of banks. Vulnerable countries should attempt to reduce the demand for them by improving domestic money, payment systems and cross-border rails. And all countries should decide in advance what they will do if a major stablecoin that has become too politically embedded to fail eventually does so. 

The geopolitical consequences sit on top of the run dynamics. Stablecoins do not cause weak-currency problems, but they reduce the frictions that slow private dollarisation. As Secretary Connally observed of the dollar itself, the consequent dollarization shifts benefits and costs across borders. The benefits of stablecoins accrue largely to the United States, as his latter-day successor Scott Bessent forcefully argues. Some of the costs fall on user countries that do not control the reserves and cannot provide the backstops that crises require. This asymmetry and the central role of private US companies will leave many countries more exposed to decisions taken in Washington and in US boardrooms than they would wish. 

The policy implications differ sharply by country. For the United States, the balance is broadly positive but with clear backstop and crisis acceleration risks. For hub jurisdictions, the calculation is more finely balanced and turns on the contingent cost of a bailout. For most others, benign neglect is appropriate. 

For most countries, central bank digital currencies and a clear legal framework for tokenised transactions address the challenge posed by stablecoins. That may, in fact, become their lasting legacy, forcing the financial authorities and incumbents to up their game and improve payment infrastructure, as argued in Danielsson (2023). 

For the countries where stablecoins matter most — those already dollarising because of a weak currency, weak institutions and high inflation — prohibition will fail. The only durable response is to reduce the demand for stablecoins by fixing what is wrong with the domestic money and payment landscape. 

Private money has failed frequently in the past, and in ways sovereign money does not — stablecoins are no different. While the fragilities are the traditional ones we have understood for a century and a half, stablecoins accelerate and amplify them, and regulatory frameworks will have to respond very quickly when they are tested. 

Who stands behind a stablecoin when everyone tries to exit at once? Exorbitant privilege comes with exorbitant obligations, and even though stablecoins are private money, nation-states will come under strong pressure to shoulder those obligations when the inevitable stablecoin crisis arrives.

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