Template-Type: ReDIF-Paper 1.0
Author-Name: Iñaki Aldasoro
Author-X-Name-First: Iñaki
Author-X-Name-Last: Aldasoro
Author-Name: Perry Mehrling
Author-X-Name-First: Perry
Author-X-Name-Last: Mehrling
Author-Name: IDaniel H. Neilson
Author-X-Name-First: Daniel H.
Author-X-Name-Last: Neilson
Title: On par: A Money View of stablecoins
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.
Creation-Date: 2023-11
File-URL: https://www.bis.org/publ/work1146.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1146.htm
File-Format: text/html
Number: 1146
Keywords: stablecoins, Eurodollar, forward market, dealer function, liquidity
Classification-JEL: E42, F33, G21, G23
Handle: RePEc:bis:biswps:1146