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Will the real stablecoin please stand up?

Author

Listed:
  • Anneke Kosse
  • Marc Glowka
  • Ilaria Mattei
  • Tara Rice

Abstract

Stablecoins are a subcategory of cryptoassets that aim (or claim) to maintain a stable value relative to a specified peg. This paper provides an overview of the evolution of the stablecoin market over the past decade and examines whether stablecoins have stayed true to their name in terms of being "stable". We study 68 stablecoins and show that not one of them has been able to maintain parity with its peg at all times. This is irrespective of their size or type of backing. Moreover, we argue that there is currently no guarantee that stablecoin issuers could redeem users' stablecoins in full and on demand. For these reasons, we conclude that the stablecoins in circulation today do not meet the key criteria for being a safe store of value and a trustworthy means of payment in the real economy. This paper also highlights some significant data gaps. Without further data on the uses and users of stablecoins, it is difficult to ascertain the risks of stablecoins to the smooth functioning of payment systems and financial stability more broadly.

Suggested Citation

  • Anneke Kosse & Marc Glowka & Ilaria Mattei & Tara Rice, 2023. "Will the real stablecoin please stand up?," BIS Papers, Bank for International Settlements, number 141.
    • Handle: RePEc:bis:bisbps:141
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    References listed on IDEAS

    as
    1. Lyons, Richard K. & Viswanath-Natraj, Ganesh, 2023. "What keeps stablecoins stable?," Journal of International Money and Finance, Elsevier, vol. 131(C).
    2. Cameron MacDonald & Laura Zhao, 2022. "Stablecoins and Their Risks to Financial Stability," Discussion Papers 2022-20, Bank of Canada.
    3. Anneke Kosse & Ilaria Mattei, 2023. "Making headway - Results of the 2022 BIS survey on central bank digital currencies and crypto," BIS Papers, Bank for International Settlements, number 136.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Rashad Ahmed & Iñaki Aldasoro, 2025. "Stablecoins and safe asset prices," BIS Working Papers 1270, Bank for International Settlements.
    2. Eleni Koutrouli & Polychronis Manousopoulos, 2025. "Exploring the Use of Crypto-Assets for Payments," FinTech, MDPI, vol. 4(2), pages 1-30, April.
    3. Alberto Di Iorio & Anneke Kosse & Ilaria Mattei, 2024. "Embracing diversity, advancing together - results of the 2023 BIS survey on central bank digital currencies and crypto," BIS Papers, Bank for International Settlements, number 147, July.
    4. Carlos Cantú & Cecilia Franco & Jon Frost, 2024. "The economic implications of services in the metaverse," BIS Papers, Bank for International Settlements, number 144, July.
    5. Iñaki Aldasoro & Matteo Aquilina & Ulf Lewrick & Sang Hyuk Lim, 2025. "Stablecoin growth - policy challenges and approaches," BIS Bulletins 108, Bank for International Settlements.
    6. Dionysopoulos, Lambis & Urquhart, Andrew, 2024. "10 years of stablecoins: Their impact, what we know, and future research directions," Economics Letters, Elsevier, vol. 244(C).
    7. Kreuzer, Christian & Laschinger, Ralf & Priberny, Christopher & Benninghoff, Sven, 2024. "Cryptocurrencies as a vehicle for capital exodus: Evidence from the Russian–Ukrainian crisis," Finance Research Letters, Elsevier, vol. 69(PB).
    8. Coste, Charles-Enguerrand, 2024. "Toss a stablecoin to your banker - Stablecoins’ impact on banks’ balance sheets and prudential ratios," Occasional Paper Series 353, European Central Bank.
    9. Philippe Bergault & Louis Bertucci & David Bouba & Olivier Gu'eant & Julien Guilbert, 2024. "Automated Market Making: the case of Pegged Assets," Papers 2411.08145, arXiv.org.
    10. Kees van Hee & Anneke Kosse & Peter Wierts & Jacob Wijngaard, 2025. "Let's speak the same language: a formally defined model to describe and compare payment system architectures," BIS Working Papers 1259, Bank for International Settlements.

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