Nobel Prize-winning economist Jean Tirole has reportedly cautioned against the improper supervision of stablecoins. Tirole said he was “very, very worried” about stablecoin oversight and the possibility of a run by depositors fueled by doubts about the underlying reserve assets to which the digital tokens were pegged. Although they could be seen by retail users as “a perfectly safe deposit,” stablecoins could become a source of losses and lead to calls for costly government-led bailouts, said Tirole, who was awarded the Nobel Prize for economics in 2014. He also cautioned that backing stablecoins with U.S. government bonds could become unpopular due to the underlying assets’ relatively low yields, pointing to previous instances where the returns of Treasury debt were “negative for a number of years” and payouts after inflation were even lower. Stablecoin issuers could thus be caught up in the “temptation” to invest in different assets that “carry higher returns and are riskier,” Tirole told.