On par: A Money View of stablecoins

Iñaki Aldasoro, Perry Mehrling and Daniel H. Neilson

No 1146, BIS Working Papers from Bank for International Settlements

Abstract: This paper presents a money view analysis of the recent crypto innovation of stablecoins, which have seen a remarkable rise and more recently some spectacular collapses. By analogizing on-chain with offshore, and developing an extended analogy of stablecoins with Eurodollars, we reveal the primitive character of the existing on-chain liquidity mechanism which supports the promise of par settlement by existing on-chain stablecoin models. Liquidity, not solvency, is the issue confronted by par settlement.

Keywords: stablecoins; Eurodollar; forward market; dealer function; liquidity (search for similar items in EconPapers)
JEL-codes: E42 F33 G21 G23 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-ban, nep-hme, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:1146

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