IDEAS home Printed from https://ideas.repec.org/a/tpr/asiaec/v21y2022i1p29-46.html
   My bibliography  Save this article

Stablecoins and Central Bank Digital Currencies: Policy and Regulatory Challenges

Author

Listed:
  • Barry Eichengreen

    (University of California, Berkeley)

  • Ganesh Viswanath-Natraj

    (University of Warwick)

Abstract

Stablecoins and central bank digital currencies are on the horizon in Asia, and in some cases have already arrived. This paper provides new analysis and a critique of the use case for both forms of digital currency. It provides time-varying estimates of devaluation risk for the leading stablecoin, Tether, using data from the futures market. It describes the formidable obstacles to widespread use of central bank digital currencies in cross-border transactions, the context in which their utility is arguably greatest. The bottom line is that significant uncertainties continue to dog the region's digital currency initiatives.

Suggested Citation

  • Barry Eichengreen & Ganesh Viswanath-Natraj, 2022. "Stablecoins and Central Bank Digital Currencies: Policy and Regulatory Challenges," Asian Economic Papers, MIT Press, vol. 21(1), pages 29-46, Winter/Sp.
    • Handle: RePEc:tpr:asiaec:v:21:y:2022:i:1:p:29-46
    DOI: 10.1162/asep_a_00843
    as

    Download full text from publisher

    File URL: https://doi.org/10.1162/asep_a_00843
    Download Restriction: Access to PDF is restricted to subscribers.
    File URL: https://libkey.io/10.1162/asep_a_00843?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Filip Hampl & Lucie Gyönyörová, 2021. "Can Fiat‐backed Stablecoins Be Considered Cash or Cash Equivalents Under International Financial Reporting Standards Rules?," Australian Accounting Review, CPA Australia, vol. 31(3), pages 233-255, September.
    2. 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)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jin, Feng & Li, Jingwei & Xue, Yi, 2023. "Preferring stablecoin over dollar: Evidence from a survey of Ethereum platform traders," Journal of International Money and Finance, Elsevier, vol. 131(C).
    2. Lyons, Richard K. & Viswanath-Natraj, Ganesh, 2023. "What keeps stablecoins stable?," Journal of International Money and Finance, Elsevier, vol. 131(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Saito, Makoto, 2022. "On expenditure/income discrepancies in national accounts in the presence of two price units," Japan and the World Economy, Elsevier, vol. 64(C).
    2. Łęt, Blanka & Sobański, Konrad & Świder, Wojciech & Włosik, Katarzyna, 2023. "What drives the popularity of stablecoins? Measuring the frequency dynamics of connectedness between volatile and stable cryptocurrencies," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    3. Raffaele Fabio Ciriello & Alexandra Cecilie Gjøl Torbensen & Magnus Rotvit Perlt Hansen & Christoph Müller-Bloch, 2023. "Blockchain-based digital rights management systems: Design principles for the music industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-21, December.
    4. Voicu D. Dragomir & Valentin Florentin Dumitru, 2023. "Recognition and Measurement of Crypto-Assets from the Perspective of Retail Holders," FinTech, MDPI, vol. 2(3), pages 1-17, August.
    5. Djogbenou, Antoine & Inan, Emre & Jasiak, Joann, 2023. "Time-varying coefficient DAR model and stability measures for stablecoin prices: An application to Tether," Journal of International Money and Finance, Elsevier, vol. 139(C).
    6. Adeyinka Adediran & Bola Babajide & Nataliia Osina, 2023. "Exploring the nexus between price and volume changes in the cryptocurrency market," Journal of Asset Management, Palgrave Macmillan, vol. 24(6), pages 498-512, October.
    7. Sood, Kirti & Singh, Simarjeet & Behl, Abhishek & Sindhwani, Rahul & Kaur, Sandeepa & Pereira, Vijay, 2023. "Identification and prioritization of the risks in the mass adoption of artificial intelligence-driven stable coins: The quest for optimal resource utilization," Resources Policy, Elsevier, vol. 81(C).
    8. Riccardo Blasis & Luca Galati & Alexander Webb & Robert I. Webb, 2023. "Intelligent design: stablecoins (in)stability and collateral during market turbulence," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-23, December.
    9. Cong, Lin William & Mayer, Simon, 2022. "The Coming Battle of Digital Currencies," Applied Economics and Policy Working Paper Series 320020, Cornell University, Department of Applied Economics and Management.
    10. Ante, Lennart & Fiedler, Ingo & Strehle, Elias, 2021. "The impact of transparent money flows: Effects of stablecoin transfers on the returns and trading volume of Bitcoin," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    11. Louis Bertucci & Sébastien Choukroun & Julien Prat, 2023. "Enjeux et promesses des stablecoins décentralisés," Revue d'économie financière, Association d'économie financière, vol. 0(1), pages 73-90.
    12. Ladislav Kristoufek, 2022. "On the role of stablecoins in cryptoasset pricing dynamics," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-26, December.
    13. Jean Barthélémy & Paul Gardin & Benoit Nguyen, 2023. "Stablecoins and the Financing of the Real Economy," Working papers 908, Banque de France.
    14. 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.
    15. Maarten van Oordt, 2022. "The Emerging Autonomy–Stability Choice for Stablecoins," Tinbergen Institute Discussion Papers 22-015/IV, Tinbergen Institute.
    16. John Caramichael & Gordon Y. Liao, 2022. "Stablecoins: Growth Potential and Impact on Banking," International Finance Discussion Papers 1334, Board of Governors of the Federal Reserve System (U.S.).
    17. Huachen Li, 2022. "Tether points, price stability, and arbitrage efficiency," Economics Bulletin, AccessEcon, vol. 42(4), pages 2193-2199.
    18. Michael Bradbury & Bryan Howieson, 2021. "Editorial," Australian Accounting Review, CPA Australia, vol. 31(3), pages 167-168, September.
    19. Binh Nguyen Thanh & Thai Nguyen Vu Hong & Huy Pham & Thanh Nguyen Cong & Thu Pham Thi Anh, 2023. "Are the stabilities of stablecoins connected?," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(3), pages 515-525, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:asiaec:v:21:y:2022:i:1:p:29-46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.