Nobel Economist Warns of Potential Multibillion-Dollar Stablecoin Bailouts

Jean Tirole, the 2014 Nobel Prize-winning economist, has issued a stark warning about the systemic risks posed by poorly regulated stablecoins. In an interview with the Financial Times, Tirole expressed DEEP concern that governments could face multibillion-dollar bailouts if these digital assets collapse during a financial crisis.

The market for stablecoins—cryptocurrencies pegged to traditional assets like the U.S. dollar—has ballooned to $284 billion. Tether and Circle, the leading issuers, back their tokens with reserves of cash, Treasury bonds, and other securities. Yet Tirole fears a loss of confidence could trigger a destabilizing wave of redemptions, breaking the peg and forcing public intervention.

Projections underscore the sector's gravity. Citi analysts forecast stablecoin growth between $500 billion and $3.7 trillion by 2030, while the U.S. Treasury anticipates a $2 trillion market by 2028. Exchange reserves recently hit a record $68 billion, though CryptoQuant data suggests slowing market-cap expansion.