Stablecoins: Promises vs. Reality: BIS report
Overview: The paper examines the evolution of the stablecoin market over the past decade and investigates whether stablecoins have truly lived up to their name in terms of stability. Stablecoins are a subcategory of cryptoassets designed to maintain a stable value relative to a specified peg.
Key Findings:
Classification of Stablecoins:
The authors classify stablecoins into four distinct types:
Those backed by fiat currency.
Those backed by commodities.
Those backed by other cryptoassets.
Algorithmic stablecoins (not backed by any specific asset).
Volatility and Parity:
While stablecoins backed by fiat currency, commodities, or other cryptoassets have generally been less volatile than traditional cryptoassets, none of them has cons...