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RE: Governor Waller: Stablecoins Help To Strengthen US Dollar

in LeoFinance • 9 months ago

I have one thing to potentially add to this discussion.

Stable coins are supposed to be backed 1:1 with dollars in a bank. This is another reason that it could act as an anchor for the financial system. If all stablecoins are backed even 50% by dollars in a bank that's a huge amount of liquidity for the banks that they wouldn't otherwise have. A fractional reserve is 20% at best these days.

9 months ago in LeoFinance by
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         9 months ago 

        You are right, for that that touch the banking system at least.

        People do not consider the demand for dollars (and Treasuries) if asset backed stablecoins get huge. If the entire stablecoin market hits $5T, a small figure considering there is about $2.3 USD in banknotes, it would be a major consumer of those assets.

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