Publications
Research, commentary, and regulatory engagement
Research and regulatory submissions from Sesame Vault, plus selected work from other organizations.
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The unnecessary war between banks and stablecoins: A curve-gated reserve partnership under the GENIUS Act
The GENIUS Act makes stablecoins safer but ties issuer income to overnight rates and funnels reserve demand into Treasury bills. This paper proposes a curve-gated partnership: the issuer holds an overnight, collateralized reserve asset while a supervised bank owns the term asset, the hedge, and the related capital and liquidity risk, and shares a capped portion of the carry only when it clears the bank's costs, hurdle, and stress tests. The aim is more resilient issuer economics in easing cycles, a compensated channel for banks to hold high-quality liquid assets, and broader Treasury demand, without weakening daily redemption or the holder's non-yield-bearing claim.
Comment letter to the OCC on the GENIUS Act proposed rule: A dynamic reserve maturity window for stablecoin reserves
Submitted with Daniel Aronoff of the MIT Department of Economics in response to the OCC's proposed rule implementing the GENIUS Act. The letter argues that confining reserves to Treasury bills of 93 days or less concentrates a sector that could exceed $2 trillion in the shortest part of the curve, where a redemption run would force selling with no central bank backstop. It proposes a Dynamic Reserve Maturity Window: one concentration measure combining direct bill holdings and reverse repo exposure, with a threshold above which overcollateralized issuers may extend maturities and a stress threshold at which mandatory rebalancing and redemption gating apply, built on the existing FICC haircut schedule and OFR repo data. The appendix answers fifteen of the rule's questions.
Unmasking the CUSIP-level concentration risk in stablecoins
Stablecoin reserves are clustering into a small set of short-dated Treasury bills. Using CUSIP-level holdings data, this report shows how the GENIUS Act's 93-day maturity limit funnels the sector into roughly 25 instruments, traces how a redemption shock would pass from primary dealers into the repo market, and sets out five policy recommendations for the Department of the Treasury.
The hidden plumbing of stablecoins: Financial and technological risks in the GENIUS Act era
MIT's Digital Currency Initiative examines what it takes for a GENIUS-compliant stablecoin to hold par at scale. The authors show that redemption depends not only on the quality of backing assets but on the functioning of Treasury and repo markets, the balance-sheet capacity of broker-dealers, and the reliability of blockchain transaction rails, and they argue for coordinated oversight across financial infrastructure and technical governance.
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