Stablecoins that are not fully backed by either central bank reserves or government securities with minimal price volatility are inherently vulnerable to runs.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Allen
Franklin Allen
Imperial College London
Agree
6
Bio/Vote History
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.
Antras
Pol Antras
Harvard
Agree
5
Bio/Vote History
Blanchard
Olivier Blanchard
Peterson Institute
Strongly Agree
10
Bio/Vote History
rarely is an answer so obvious
Bloom
Nicholas Bloom
Stanford
Uncertain
3
Bio/Vote History
Blundell
Richard William Blundell
University College London Did Not Answer Bio/Vote History
Bénassy-Quéré
Agnès Bénassy-Quéré
Paris School of Economics
Strongly Agree
10
Bio/Vote History
There is ample historical evidence on the vulnerability of conventionally fixed exchange rates; could be even worse for private currencies.
Carletti
Elena Carletti
Bocconi
Agree
6
Bio/Vote History
Danthine
Jean-Pierre Danthine
Paris School of Economics
Strongly Agree
9
Bio/Vote History
De Grauwe
Paul De Grauwe
LSE
Agree
8
Bio/Vote History
Eeckhout
Jan Eeckhout
UPF Barcelona
Strongly Agree
7
Bio/Vote History
Fehr
Ernst Fehr
Universität Zurich
Agree
8
Bio/Vote History
Freixas
Xavier Freixas
Barcelona GSE
Strongly Agree
10
Bio/Vote History
This corresponds to a classical bank run where assets are illiquid while the liabilities have a fixed redemption value
Fuchs-Schündeln
Nicola Fuchs-Schündeln
Goethe-Universität Frankfurt
Agree
4
Bio/Vote History
Galí
Jordi Galí
Barcelona GSE
Agree
7
Bio/Vote History
Giavazzi
Francesco Giavazzi
Bocconi Did Not Answer Bio/Vote History
Griffith
Rachel Griffith
University of Manchester
No Opinion
Bio/Vote History
Guerrieri
Veronica Guerrieri
Chicago Booth Did Not Answer Bio/Vote History
Guiso
Luigi Guiso
Einaudi Institute for Economics and Finance
Uncertain
4
Bio/Vote History
Guriev
Sergei Guriev
Sciences Po
Strongly Agree
10
Bio/Vote History
Honohan
Patrick Honohan
Trinity College Dublin
Strongly Agree
10
Bio/Vote History
The stability promise amounts to a sequential server constraint, which allows the first movers to exit without penalty.
Javorcik
Beata Javorcik
University of Oxford Did Not Answer Bio/Vote History
Krahnen
Jan Pieter Krahnen
Goethe University Frankfurt
Agree
5
Bio/Vote History
With positive asset volatility, the 'stable'-claim no longer holds for all creditors. Then, sequencing matters, i.e., a run is possible.
Kőszegi
Botond Kőszegi
Central European University
No Opinion
Bio/Vote History
La Ferrara
Eliana La Ferrara
Harvard Kennedy Did Not Answer Bio/Vote History
Leuz
Christian Leuz
Chicago Booth
Agree
4
Bio/Vote History
Mayer
Thierry Mayer
Sciences-Po Did Not Answer Bio/Vote History
Meghir
Costas Meghir
Yale Did Not Answer Bio/Vote History
Pagano
Marco Pagano
Università di Napoli Federico II
Strongly Agree
7
Bio/Vote History
Pastor
Lubos Pastor
Chicago Booth
Agree
8
Bio/Vote History
The main features that help prevent bank runs, such as deposit insurance and the lender of last resort, are missing in the crypto world.
Persson
Torsten Persson
Stockholm University Did Not Answer Bio/Vote History
Pissarides
Christopher Pissarides
London School of Economics and Political Science Did Not Answer Bio/Vote History
Portes
Richard Portes
London Business School
Strongly Agree
10
Bio/Vote History
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.
Prendergast
Canice Prendergast
Chicago Booth
Agree
8
Bio/Vote History
Propper
Carol Propper
Imperial College London
Agree
3
Bio/Vote History
Rasul
Imran Rasul
University College London Did Not Answer Bio/Vote History
Reichlin
Lucrezia Reichlin
London Business School Did Not Answer Bio/Vote History
Reis
Ricardo Reis
London School of Economics
Agree
8
Bio/Vote History
Repullo
Rafael Repullo
CEMFI
Strongly Agree
8
Bio/Vote History
Rey
Hélène Rey
London Business School
Strongly Agree
8
Bio/Vote History
Schoar
Antoinette Schoar
MIT
Strongly Agree
9
Bio/Vote History
Storesletten
Kjetil Storesletten
University of Minnesota
Strongly Agree
5
Bio/Vote History
Sturm
Daniel Sturm
London School of Economics
Agree
8
Bio/Vote History
Van Reenen
John Van Reenen
LSE
Strongly Agree
7
Bio/Vote History
Vickers
John Vickers
Oxford
Agree
5
Bio/Vote History
Voth
Hans-Joachim Voth
University of Zurich
Agree
7
Bio/Vote History
Whelan
Karl Whelan
University College Dublin
Strongly Agree
10
Bio/Vote History
I'm not sure there is a good reason for stablecoins to exist, particularly those backed by crypto assets.
Wyplosz
Charles Wyplosz
The Graduate Institute Geneva
Strongly Agree
9
Bio/Vote History
Zilibotti
Fabrizio Zilibotti
Yale University Did Not Answer Bio/Vote History