Can Stablecoins Be Stable?

The authors thank Joseph Abadi, Markus Brunnermeier, Doug Diamond, Darrell Duffie, François Gourio, Sebastian Gryglewicz, Zhiguo He, Jiasun Li, Ye Li, Simon Mayer, Raghu Rajan, Linda Schilling, Valentin Schubert, Fabrice Tourre, Anton Tsoy, Ganesh Viswanath-Natraj, and Anthony Lee Zhang for valuable comments. The authors also thank participants in seminars and workshops at the Stockholm School of Economics; Booth School of Business; Berkeley Haas; Zurich University; HEC Paris; Dauphine; McGill Desautels; the Bank of Canada; the Federal Reserve Bank of Philadelphia; the Federal Reserve Bank of Chicago; the Office for Financial Research; Sciences Po; the Riksbank; the 2021 Swiss National Bank–Center for Innovative Finance Conference on Cryptoassets and Financial Innovation; the Chicago Conference on Data and Welfare in Household Finance; the Conference on Macro, Money, and International Finance of the Center for Economic Studies and the ifo Institute; the Federal Reserve Bank of Philadelphia; the Fifth Summer Finance Conference at the University of Washington Foster School of Business; the Twenty-First Annual Bank Research Conference sponsored by the Federal Deposit Insurance Corporation’s Center for Financial Research; the 2023 Annual Meeting of the American Finance Association; the 2023 Annual Meeting of the Midwest Finance Association; the Second Workshop on Financial Intermediation and Corporate Debt Markets; the Crypto and Blockchain Economics Research Forum; the Banco de España–CEMFI Conference on Financial Stability; the Twelfth IBEO Workshop in Corporate Finance and Financial Intermediation; and the 2023 Conference of the Financial Intermediation Research Society. The authors gratefully acknowledge support from the Fama-Miller Center for Research in Finance and thank Livia Amato and Johan Allen for excellent research assistance.