Are stablecoins stable? U.S. Treasury's Liang says not true, points to 'run risk'

Treasury Undersecretary for Domestic Finance Nellie Liang said Tuesday there is a risk that stablecoins are not really backed dollar-for-dollar. While stablecoin issuers usually claim to have a one-to-one backing, "assets may not be able to deliver a $1 under stress periods, issues around redemption and undisclosed fees," she told lawmakers in a hearing entitled, “Examining the President’s Working Group on Financial Markets Report on Stablecoins.” Despite a slew of concerns surrounding stablecoins ranging from collateral backing to systemic risks, Liang sees stablecoins as an efficient payment method, and said there is no reason why a privately-developed stablecoin and a U.S. central bank digital currency could not coexist. So far the U.S. has been neutral on the idea of implementing a CBDC. Earlier this month, the New York Federal Reserve said stablecoins are unlikely to become the future of payments. Some of the largest stablecoins, a subset of the ~$1.75T