Economist Eswar Prasad warned that a bank run on Stablecoins could fallout into the U.S. bond markets if issuers sell U.S. Treasurys to honor redemptions.

Prasad warned that if a bank run should occur while bond market sentiment remains “very fragile,” there could be a “multiplier effect” due to immense selling pressure on Treasurys.

“A large volume of redemptions even in a fairly liquid market can create turmoil in the underlying securities market. And given how important the Treasury securities market is to the broader financial system in the U.S. … I think regulators are rightly concerned.”