Global watchdog warns the $300 billion stablecoin market could face bank runs even with full reserves - Cryptonews.net

A global financial watchdog has cautioned that the roughly $300 billion stablecoin market remains vulnerable to runs, even when issuers hold full reserves backing their tokens. The warning challenges a common assumption: that 100% backing alone guarantees stability during periods of stress.

The concern centers on how reserves are structured and how quickly they can be converted into cash. If holders rush to redeem simultaneously, an issuer may be forced to sell reserve assets at a loss or face delays, potentially undermining confidence and amplifying outflows. In that sense, the risk is less about whether reserves exist and more about whether they are liquid enough to meet rapid redemption demands.

For markets, the warning adds a layer to how stablecoins are assessed alongside reserve transparency. Key things to watch include the composition and maturity of reserve assets, redemption terms, and any regulatory responses that follow. Stablecoins remain deeply embedded in crypto trading and settlement, so questions about their resilience carry implications beyond the tokens themselves.