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Stablecoins As a New Word in the Cryptocurrency Market

Author

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  • Tatiana A. Gorbacheva

    (Moscow Witte University, Moscow 115432, Russian Federation)

Abstract

In the past few years, along with the crypto assets market, a new term has appeared: stablecoins. Unlike cryptocurrencies, however, not so much research has been devoted to this topic. The emergence of global stablecoin projects, a significant increase in the volume of investment initiatives, and growth in the number of transactions have forced central banks to seriously pay attention to these in order to ensure financial stability as one of their functions. This topic is undoubtedly relevant due to the novelty of the concept which has appeared. The purpose of this article is to study the economic essence of stablecoins, their types, and the current state of this market. The methods of comparative analysis as well as critical and systematic approach to the study of information are used in the work. Existing ways to define the concept of stablecoins are investigated. The classifications of stablecoins and the main types of the most reliable coins on the market are examined. The current state of the stablecoin market is analyzed. As a result of the study, a number of conclusions have been made. Despite the lack of a legally fixed and generally accepted definition of stablecoins, in general, stablecoins are tokens secured by different types of assets. The economic essence of stablecoins is revealed through the goals of their creation, types of security and stabilization mechanisms, as well as the nature of the relationship between the issuer and the owner of the stablecoin. Over the past three years, the stablecoin market has grown almost fivefold. Such growth means significant penetration into the payment system, and then into the global financial system, which requires the development of international regulatory standards to minimize possible risks and preserve financial stability. The prospects for the development of stablecoins are associated with the creation and promotion of digital currencies of central banks (central securities) and cross-border payments in one or more central securities.

Suggested Citation

  • Tatiana A. Gorbacheva, 2022. "Stablecoins As a New Word in the Cryptocurrency Market," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 126-139, February.
    • Handle: RePEc:fru:finjrn:220108:p:126-139
    DOI: 10.31107/2075-1990-2022-1-126-139
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    References listed on IDEAS

    as
    1. Douglas Arner & Raphael Auer & Jon Frost, 2020. "Stablecoins: potential, risks and regulation," BIS Working Papers 905, Bank for International Settlements.
    2. Jon Frost & Hyun Song Shin & Peter Wierts, 2020. "An early stablecoin? The Bank of Amsterdam and the governance of money," Working Papers 696, DNB.
    3. Douglas Arner & Raphael Auer & Jon Frost, 2020. "Stablecoins: risks, potential and regulation," Revista de Estabilidad Financiera, Banco de España, issue Autumn.
    4. Richard K. Lyons & Ganesh Viswanath-Natraj, 2020. "What Keeps Stablecoins Stable?," NBER Working Papers 27136, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    stablecoin; stable coin; digital currencies; cryptocurrency; crypto asset; digital currencies of central banks; token; fiat currencies; collateral;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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