Stablecoins that are not fully backed by either central bank reserves or government securities with minimal price volatility are inherently vulnerable to runs.
Responses
© 2025. Kent A. Clark Center for Global Markets.
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Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
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Participant |
University |
Vote |
Confidence |
Bio/Vote History |
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 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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It’s a very similar situation to bank runs. There’s an advantage t leaving when you are just above the stable price leading to runs.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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There is ample historical evidence on the vulnerability of conventionally fixed exchange rates; could be even worse for private currencies.
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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rarely is an answer so obvious
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 Nicholas Bloom |
Stanford | Bio/Vote History | ||
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 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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 Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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This corresponds to a classical bank run where assets are illiquid while the liabilities have a fixed redemption value
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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 Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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The stability promise amounts to a sequential server constraint, which allows the first movers to exit without penalty.
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 Beata Javorcik |
University of Oxford | Did Not Answer | Bio/Vote History | |
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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With positive asset volatility, the 'stable'-claim no longer holds for all creditors. Then, sequencing matters, i.e., a run is possible.
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 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
 Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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 Costas Meghir |
Yale | Did Not Answer | Bio/Vote History | |
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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The main features that help prevent bank runs, such as deposit insurance and the lender of last resort, are missing in the crypto world.
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 Torsten Persson |
Stockholm University | Did Not Answer | Bio/Vote History | |
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 Christopher Pissarides |
London School of Economics and Political Science | Did Not Answer | Bio/Vote History | |
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 Richard Portes |
London Business School | Bio/Vote History | ||
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As for MMFs, which had to be rescued in 2008 and 2020. But even with backing, may be vulnerable if UST market freezes. No LoLR.
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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 Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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 Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Bio/Vote History | ||
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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 John Van Reenen |
LSE | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Karl Whelan |
University College Dublin | Bio/Vote History | ||
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I'm not sure there is a good reason for stablecoins to exist, particularly those backed by crypto assets.
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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 Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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