How to stop stablecoins from hoarding precious collateral

Repo markets expert and crypto bank chief exec think Fed reserves are the right answer

Treasure chest

US rulemakers are whittling down their list of valid methods for collateralising stablecoins, looking for those that can actually create true stability. Recent proposals from legislators and regulators have shifted attention away from turning stablecoin issuers into insured depository institutions – which was one recommendation made by the President’s Working Group on financial markets in November 2021.

Instead, the US authorities’ two preferred alternatives at the moment are for stablecoin

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