Abstract: Stablecoins are a new form of digital private money that promises a stable and secure way to park funds in the crypto universe. The dominant stablecoins are pegged one-to-one to the US dollar. Much like banks or money market funds, stablecoin issuers face the risk of runs. A large demand for redemptions can only be met if issuers are able to quickly raise sufficient funds. As a result, stablecoin holders are sensitive to adverse information about the quality of the issuer’s assets and potential exposures to custodial, operational, and technological risk. This paper provides a theoretical framework that can inform the ongoing regulatory debate and offer a set of new testable implications.