Currency stability using blockchain technology

【Author】 Routledge, Bryan; Zetlin-Jones, Ariel

【Source】JOURNAL OF ECONOMIC DYNAMICS & CONTROL

【影响因子】1.620

【Abstract】To date, cryptocurrency prices are volatile and many cryptocurrency developers have adopted ad hoc approaches to stabilize their cryptocurrency price. When these currencies are not 100% backed by other valued assets, part of their price volatility may arise from self-fulfilling expectations of a speculative attack (as in Obstfeld (1996)). We show that an exchange rate policy, which is less than 100% backed and dynamically adjusts in response to traders' conversion demand eliminates speculative attacks while, under some conditions, preserving much of the desired exchange rate stability. This dynamic exchange rate policy admits a great deal of discretion to and requires commitment by the party implementing the policy. We demonstrate how to implement this policy using the Ethereum network-a smart contract blockchain environment-and how this implementation yields commitment to the policy. (C) 2021 The Author(s). Published by Elsevier B.V.

【Keywords】Blockchain; Cryptocurrency; Currency stability; Ethereum; Exchange rates; Fintech; Smart-contract; Speculative attacks; Stable-coin

【发表时间】2022 SEP

【收录时间】2022-09-15

【文献类型】理论模型

【主题类别】

区块链治理-市场治理-数字货币