Altcoins Talks - Cryptocurrency Forum
Further Discussions => Banks & Cryptos => Topic started by: Dociko on September 23, 2020, 09:39:20 PM
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Stablecoin runs could occur if users lose confidence in the issuer or its network. The European Central Bank has warned the global community about the risks of so-called “stablecoin runs.”
Analogous to the term “bank runs” in the traditional financial system, stablecoin runs could occur if end users lose confidence in the issuer or its network, the ECB wrote in a Sept. 22 report.
In traditional finance, a bank run occurs when a large number of customers withdraw their deposits simultaneously over concerns of the bank’s solvency. As more people withdraw their funds, the probability of default increases, triggering more withdrawals.
Details: https://cointelegraph.com/news/europe-s-central-bank-is-concerned-about-possible-runs-on-stablecoins