TechFlow news, September 1 — According to Jinshi Data, Nobel laureate in economics Jean Tirole warned that current regulation of stablecoins is "insufficient," and if these tokens collapse during a future financial crisis, governments might be forced to spend billions of dollars on bailouts.
In an interview, the 2014 Nobel economics prize winner said he is "very, very concerned" about stablecoin regulation and the possibility of depositors rushing to withdraw their funds if confidence in the underlying reserve assets linked to these digital tokens erodes. Tirole noted that although stablecoins may appear to ordinary users as "absolutely safe deposits," they could become sources of losses and trigger calls for costly government rescues.
He also warned that using U.S. Treasury bonds as backing assets for stablecoins could become unattractive, given their relatively low yields. As a result, stablecoin issuers might be tempted to invest in other assets offering "higher returns but greater risks."
