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Stablecoins and the Financing of the Real Economy

Author

Listed:
  • Jean Barthélémy
  • Paul Gardin
  • Benoit Nguyen

Abstract

Stablecoins are crypto-assets that aim to maintain a stable value relative to a fiat currency. This paper documents one implication of their massive growth since 2020 for the financing of the real economy. The largest stablecoins manage their peg with the US dollar by holding short-term safe assets. We identify changes in the stablecoin demand for US dollardenominated commercial papers (CP) by exploiting cross-sectional and time-varying heterogeneity in the main tablecoins’ reserve assets policy. We show that CP issuers catered to the additional demand from stablecoins by issuing more, illustrating the implications of stablecoins for financial stability and the financing of the real economy.

Suggested Citation

  • Jean Barthélémy & Paul Gardin & Benoit Nguyen, 2023. "Stablecoins and the Financing of the Real Economy," Working papers 908, Banque de France.
    • Handle: RePEc:bfr:banfra:908
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    References listed on IDEAS

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    Cited by:

    1. Wu, Gabriel Shui Tang & Leung, Pak Ho, 2023. "Do asset-backed stablecoins spread crypto volatility to traditional financial assets? Evidence from Tether," Economics Letters, Elsevier, vol. 229(C).

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    More about this item

    Keywords

    Crypto-Assets; Stablecoins; Financial Markets; Safe Assets;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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