Stablecoins and money market funds: Less similar than you think
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Stablecoin balance sheet structures closely resemble those of money market funds. This column finds that despite these similarities, their reactions to crypto and US monetary policy shocks are different. Following a crypto shock, the assets under management of money market funds barely bulge whereas the capitalisation of stablecoins drops significantly. After a monetary policy tightening, prime money market fund assets rise while stablecoin market capitalisation substantially declines. As
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