Back to Treasury warns stablecoin loophole could threaten $6.6 trillion in bank deposits
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If insured deposits erode due to stablecoin outflows, banks may respond by tightening their lending standards.
Explanation
Loss of core deposits reduces banks" funding, which typically leads them to tighten credit to preserve capital and liquidity.
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Related Questions
On what date did the House of Representatives pass the GENIUS Act, prompting bank warnings about stablecoin risks?
Easymultiple choiceThe GENIUS Act includes dual-supervision rules that may allow nonbank stablecoin issuers access to Federal Reserve facilities.
Easytrue falseWhat primary risk did major banks highlight following passage of the GENIUS Act?
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