Currency Stability Using Blockchain Technology

Bryan Routledge and Ariel Zetlin-Jones
Additional contact information
Bryan Routledge: Carnegie Mellon University

No 1160, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: Arbitrary speculative attacks on currencies can arise from self-fulfilling expectations. This is a well-studied source of currency crises. In this paper, we show that blockchain distributed ledger technologies, such as those which support Bitcoin and Ethereum, can be adapted to eliminate self-fulfilling speculative attacks on a currency. We show how to develop a stable currency peg, such as Pesos to Dollars, using a cryptocurrency. We show the peg is immune to speculative attacks arising from self-fulfilling prophecies and estimate the size of reserves and transaction costs needed to support the peg.

Date: 2018
New Economics Papers: this item is included in nep-mon and nep-pay
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2018/paper_1160.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:1160

Access Statistics for this paper

More papers in 2018 Meeting Papers from Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().