Nobel Prize in Economics Winner: Stablecoins Might Trigger Systemic Bailouts Funded by Taxpayers

French economist and 2014 Nobel laureate in Economic Sciences, Jean Tirole, has recently warned of serious regulatory gaps with regard to stablecoins, suggesting that in the event of a financial crisis, governments might be forced to use billions of dollars of public funds to bail out investors.

"Very, very worried"

Tirole expressed his "very, very worried" sentiments about the current state of stablecoin regulation in an interview with the Financial Times during the Lindau Nobel Laureate Meeting in Germany. He noted that ordinary users might view stablecoins as "completely safe deposits," but any credit doubts about their underlying reserve assets could easily trigger a run, causing the token prices to decouple from their peg, and ultimately putting immense pressure on the government to provide bailouts.

Low U.S. Treasury yields may create "temptation to take risks"

Stablecoins are typically backed by low-risk assets such as U.S. Treasury bonds. However, Tirole warned that U.S. Treasury yields have historically been in a negative real interest rate range, which might lead stablecoin issuers to be "tempted" to shift towards higher-yielding, higher-risk assets.

Once the quality of reserve assets declines, the likelihood of stablecoins uncoupling from their pegs increases, and holders—whether retail investors or institutions—might suffer losses and apply pressure on the government. He cautioned that in the past decades, depositors in traditional banks without insurance rarely truly bore the losses, a historical precedent that would reinforce market expectations of government backstopping.

Regulatory effectiveness faces political interference

Tirole acknowledged that the aforementioned risks could, in principle, be managed through strict global regulation, but he frankly stated that this is a "huge assumption." He specifically pointed out that "some key members of the U.S. government have personal financial interests in the cryptocurrency field, with personal interests in addition to ideological factors." Trump and his family members have invested in multiple crypto businesses, including a project issuing a stablecoin named USD1.

Multiple regulatory bodies sound the alarm

Tirole's statement is not an isolated voice. The European Central Bank warned a month earlier that the scale expansion of dollar-denominated stablecoins is threatening its monetary policy autonomy; the Bank for International Settlements (BIS) also pointed out earlier this year that such tokens "perform poorly" on the core standards needed for widespread monetization.

Currently, the global circulation of stablecoins has risen to about 280 billion U.S. dollars. The United States passed legislation in July this year, paving the way for banks to issue stablecoins pegged to the U.S. dollar, further accelerating the expansion of this market. Against the backdrop of the Trump administration's policy positioning stablecoins as mainstream financial infrastructure, Tirole's warning rings particularly jarring.