What keeps stablecoins stable?

【Author】 Lyons, Richard K.; Viswanath-Natraj, Ganesh

【Source】JOURNAL OF INTERNATIONAL MONEY AND FINANCE

【影响因子】2.762

【Abstract】Using trades between the stablecoin treasury and private investors, we quantify how improved arbitrage design stabilizes the price of the dominant stablecoin, Tether. We iden-tify two 2019 design reforms: migration of Tether from the Omni to the Ethereum block-chain and decentralization of issuance. These reforms increased investor access to arbitrage trading with the treasury, reducing the absolute size of peg deviations by half. Further evi-dence for the importance of arbitrage design is present in the stability mechanism of the stablecoin DAI and in the creation of authorized merchants for the pegged coin WBTC.(c) 2022 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

【Keywords】Cryptocurrency; Stablecoins; Tether; Arbitrage; Exchange rates

【发表时间】2023 MAR

【收录时间】2023-06-17

【文献类型】实证数据

【主题类别】

区块链治理-市场治理-数字货币