Redeemable Platform Currencies

Yang You and Kenneth Rogoff

No 26464, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Can massive online retailers such as Amazon and Alibaba issue digital tokens that potentially compete with bank debit accounts? There is a long history of trading stamps and loyalty points, but new technologies are poised to sharply raise the significance of redeemable assets as a store of value. Here we develop a simple stylized model of redeemable tokens that can be used to study sales and pricing strategies for issuing tokens, including ICOs. Our central finding is that platforms can generally earn higher revenues by making tokens non-tradable unless they can generate a sufficiently high outside-platform convenience yield.

JEL-codes: E42 G23 L51 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-mac, nep-mon, nep-ore and nep-pay
Note: EFG IFM ME
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Citations: View citations in EconPapers (5)

Published as Kenneth Rogoff & Yang Yous, 2023. "Redeemable Platform Currencies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(2), pages 975-1008.

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Journal Article: Redeemable Platform Currencies (2023)
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