Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/207616
Authors: 
Bullmann, Dirk
Klemm, Jonas
Pinna, Andrea
Year of Publication: 
2019
Series/Report no.: 
ECB Occasional Paper 230
Abstract: 
Stablecoins claim to stabilise the value of major currencies in the volatile crypto-asset market. This paper describes the often complex functioning of different types of stablecoins and proposes a taxonomy of stablecoin initiatives. To this end it relies on a novel framework for their classification, based on the key dimensions that matter for crypto-assets, namely: (i) accountability of issuer, (ii) decentralisation of responsibilities, and (iii) what underpins the value of the asset. The analysis of different types of stablecoins shows a trade-off between the novelty of the stabilisation mechanism used in an initiative (from mirroring the traditional electronic money approach to the alleged introduction of an "algorithmic central bank") and its capacity to maintain a stable market value. While relatively less innovative stablecoins could provide a solution to users seeking a stable store of value, especially if legitimised by the adherence to standards that are typical of payment services, the jury is still out on the potential future role of more innovative stablecoins outside their core user base.
Subjects: 
stablecoins
crypto-assets
distributed ledger technology
electronic money
JEL: 
E42
L17
O33
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3871-6
Document Type: 
Research Report

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