Digital Assets and the Exorbitant Dollar Privilege
Marina Azzimonti and
Vincenzo Quadrini
AEA Papers and Proceedings, 2024, vol. 114, 153-56
Abstract:
This paper analyzes how the rise of digital assets, particularly stablecoins, affects the US dollar's dominance in global financial markets. It discusses whether stablecoins, backed by US debt or other assets such as cryptocurrencies, could replace traditional US safe assets. On the one hand, stablecoins could increase the demand for dollar reserves, strengthening the international role of the dollar. On the other hand, if stablecoins are backed by nondollar reserves, the global demand for dollars may decline, potentially reducing its international role.
JEL-codes: E41 E42 F30 G15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:aea:apandp:v:114:y:2024:p:153-56
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DOI: 10.1257/pandp.20241069
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