The Federal Reserve Banks of Boston and New York published a staff report on Sept. 26 comparing stablecoins, such as Tether (USDT) and USD Coin (USDC), to money market funds. Key findings in the report include the observation that stablecoins and money market funds follow similar patterns during runs and that stablecoins could inject instability into the broader financial system.
The report, titled “Runs and Flights to Safety: Are Stablecoins the New Money Market Funds?,” includes a comprehensive comparison of investor behavior during the stablecoin runs of 2022 and 2023 to investor behavior during the money market fund runs of 2008 and 2020.