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Related papers: Stablecoins 2.0: Economic Foundations and Risk-bas…

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With market capitalization exceeding USD250 billion by mid-2025, stablecoins have evolved from a crypto-focused innovation into a vital component of the global monetary structure. This paper identifies the characteristics of stablecoins…

General Finance · Quantitative Finance 2025-10-14 Hongzhe Wen , Songbai Li , R. S. M. Lau , Jamie Zhang

The Holy Grail of a decentralised stablecoin is achieved on rigorous mathematical frameworks, obtaining multiple advantageous proofs: stability, convergence, truthfulness, faithfulness, and malicious-security. These properties could only be…

Cryptography and Security · Computer Science 2019-09-18 David Cerezo Sánchez

The rise of Decentralized Finance ("DeFi") on the Ethereum blockchain has enabled the creation of lending platforms, which serve as marketplaces to lend and borrow digital currencies. We first categorize the activity of lending platforms…

Trading and Market Microstructure · Quantitative Finance 2022-06-08 Michael Darlin , Georgios Palaiokrassas , Leandros Tassiulas

Recently, the notion of cryptocurrencies has come to the fore of public interest. These assets that exist only in electronic form, with no underlying value, offer the owners some protection from tracking or seizure by government or…

Mathematical Finance · Quantitative Finance 2018-05-09 Carey Caginalp

Stablecoins are digital assets designed to maintain a stable value, typically pegged to traditional currencies. Despite their growing prominence, many stablecoins have struggled to consistently meet stability expectations, and their…

Cryptography and Security · Computer Science 2025-05-07 Francesco De Sclavis , Giuseppe Galano , Aldo Glielmo , Matteo Nardelli

Stablecoins have emerged as a significant component of global financial infrastructure, with aggregate market capitalization surpassing USD250 billion in 2025. Their increasing integration into payment and settlement systems has…

Risk Management · Quantitative Finance 2025-10-14 Hongzhe Wen , R. S. M. Lau

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…

General Economics · Economics 2022-02-16 Barry Eichengreen , Ganesh Viswanath-Natraj

The `Black Thursday' crisis in cryptocurrency markets demonstrated deleveraging risks in over-collateralized non-custodial stablecoins. We develop a stochastic model that helps explain deleveraging crises in these over-collateralized…

Trading and Market Microstructure · Quantitative Finance 2022-08-02 Ariah Klages-Mundt , Andreea Minca

Stablecoins have emerged as a rapidly growing digital payment instrument, raising the question of whether blockchain-based settlement can function as a substitute for incumbent card networks in retail payments. This Systematization of…

General Finance · Quantitative Finance 2026-01-05 Yuquan Li , Yuexin Xiang , Qin Wang , Tsz Hon Yuen , Andreas Deppeler , Jiangshan Yu

Cryptocurrency refers to a type of digital asset that uses distributed ledger, or blockchain, technology to enable a secure transaction. Although the technology is widely misunderstood, many central banks are considering launching their own…

Computational Finance · Quantitative Finance 2020-07-30 Wolfgang Karl Härdle , Campbell R. Harvey , Raphael C. G. Reule

Cryptocurrency is a novel exploration of a form of currency that proposes a decentralized electronic payment scheme based on blockchain technology and cryptographic theory. While cryptocurrency has the security characteristics of being…

Cryptography and Security · Computer Science 2025-03-31 Zekai Liu , Xiaoqi Li

In this paper, we explore the short- and long-term stability of backed stablecoins offering constant mint and redeem prices to all agents. We refer to such designs as price window-based, since the mint and redeem prices constrain the…

Computer Science and Game Theory · Computer Science 2026-02-19 Katherine Molinet , Aris Filos-Ratsikas

Two of the most important technological advancements currently underway are the advent of quantum technologies, and the transitioning of global financial systems towards cryptographic assets, notably blockchain-based cryptocurrencies and…

Pricing of Securities · Quantitative Finance 2021-02-02 Peter P. Rohde , Vijay Mohan , Sinclair Davidson , Chris Berg , Darcy Allen , Gavin K. Brennen , Jason Potts

The blockchain paradigm provides a mechanism for content dissemination and distributed consensus on Peer-to-Peer (P2P) networks. While this paradigm has been widely adopted in industry, it has not been carefully analyzed in terms of its…

Distributed, Parallel, and Cluster Computing · Computer Science 2020-12-22 Aditya Gopalan , Abishek Sankararaman , Anwar Walid , Sriram Vishwanath

Cryptocurrencies and blockchain networks have attracted tremendous attention from their volatile price movements and the promise of decentralization. However, most projects run on business narratives with no way to test and verify their…

Multiagent Systems · Computer Science 2019-07-02 Zixuan Zhang

Stablecoins have turned out to be the "killer" use case of the growing digital asset space. However, risk management frameworks, including regulatory ones, have been largely absent. In this paper, we address the critical question of…

Risk Management · Quantitative Finance 2024-01-25 Marcel Bluhm , Adrian Cachinero Vasiljević , Sébastien Derivaux , Søren Terp Hørlück Jessen

This paper investigates systemic risk transmission across stablecoin markets using Quantile Vector Autoregression (QVAR). Analyzing eight major stablecoins with day data coverage from 2021 to 2025, supplemented by minute-level event studies…

General Economics · Economics 2026-02-24 Wenbin Wu , Can Liu

In decentralized finance (DeFi), stablecoins like DAI are designed to offer a stable value amidst the fluctuating nature of cryptocurrencies. We examine the class of crypto-backed stable derivatives, with a focus on mechanisms for price…

Risk Management · Quantitative Finance 2024-02-29 Zhenbang Feng , Hardhik Mohanty , Bhaskar Krishnamachari

There are a multitude of Blockchain-based physical infrastructure systems, operating on a crypto-currency enabled token economy, where infrastructure suppliers are rewarded with tokens for enabling, validating, managing and/or securing the…

Distributed, Parallel, and Cluster Computing · Computer Science 2022-11-09 Oguzhan Akcin , Robert P. Streit , Benjamin Oommen , Sriram Vishwanath , Sandeep Chinchali

We review different classes of cryptocurrencies with emphasis on their economic properties. Pure-asset coins such as Bitcoin, Ethereum and Ripple are characterized by not being a liability of any economic agent and most resemble commodities…

General Economics · Economics 2021-09-22 Matheus R. Grasselli , Alexander Lipton