Economists in New York study the phenomenon of the sustainability of dollar-stablecoins

Stablecoins have the smallest discount when used as collateral in cryptocurrency lending operations.
A group of economists in New York City presented the result of their study on the phenomenon of dollar-stablecoins. Despite a challenging 2022 for the cryptocurrency market, such digital assets have mostly shown resilience.
The researchers pointed out that when dollar stablecoins are used as collateral in lending operations, the amount of discount in their valuation is minimal compared to other assets acting as collateral in the cryptosphere.
It is this circumstance that led to the conclusion that in a situation of growth of investments in the cryptocurrency market, dollar steblecoins can demonstrate stability even if they do not have full collateral in the form of liquid assets. Another issue is when there is an outflow of investors’ funds from the cryptocurrency market: in this case, the issuers of steblecoins need to increase the share of collateralized assets to guarantee their stability.
Another important point for the circulation of staplecoins is that investors who accept dollar staplecoins in transactions thereby assume the financial risks associated with the possible loss of parity of such assets with the U.S. dollar.
However, the situation in the market is such that lending dollar stablocoins in lending transactions at an average annual rate of 20% provides some hedging of the risk of such digital assets losing parity with the U.S. dollar. This circumstance generally provides for sustained investor interest in dollar-denominated stablecoins.
As a reminder, the TerraUSD Stablecoin crash was previously a factor in collapse one of the largest cryptocurrency trading platforms in the world – cryptocurrency exchange FTX.

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