I. Executive Summary This report examines the multifaceted risks arising from the increasing integration of stablecoins with U.S. sovereign debt. While direct "conversion" of outstanding debt into stablecoins is not the primary mechanism, the significant and growing role of stablecoins as purchasers of U.S. Treasuries introduces novel systemic vulnerabilities. The analysis highlights critical financial stability concerns, including de-pegging events and liquidity risks, alongside profound challenges to monetary policy and sovereign control. Furthermore, the fragmented regulatory landscape and persistent operational vulnerabilities amplify these risks. A robust, harmonized regulatory framework and proactive policy adaptation are imperative to mitigate these emerging challenges while strategically leveraging stablecoins' potential benefits for financial efficiency and the global standing of the U.S. dollar. Podcast II. Introduction: Stablecoins and the Landscape of Sovereig...
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