Stablecoins and Crypto Shocks: An Update

Kenechukwu Anadu (), Pablo Azar, Catherine Huang, Marco Cipriani, Thomas Eisenbach, Gabriele La Spada, Mattia Landoni, Marco Macchiavelli, Antoine Malfroy-Camine and J. Christina Wang

No 20250423, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Stablecoins are crypto assets whose value is pegged to that of a fiat currency, usually the U.S. dollar. In our first Liberty Street Economics post, we described the rapid growth of stablecoins, the different types of stablecoin arrangements, and the May 2022 run on TerraUSD, the fourth largest stablecoin at the time. In a subsequent post, we estimated the impact of large declines in the price of bitcoin on cumulative net flows into stablecoins and showed the existence of flight-to-safety dynamics similar to those observed in money market mutual funds during periods of stress. In this post, we document the growth of stablecoins since 2019, including the evolution of the reported collateral backing major stablecoins. Then, we estimate the impact on the stablecoin industry of large bitcoin price increases that occurred between 2021 and 2025.

Keywords: stablecoins; crypto assets (search for similar items in EconPapers)
JEL-codes: G23 (search for similar items in EconPapers)
Date: 2025-04-23
New Economics Papers: this item is included in nep-mon and nep-pay
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