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2022 | OriginalPaper | Chapter

Stablecoins: Reducing the Volatility of Cryptocurrencies

Authors : Ayten Kahya, Bhaskar Krishnamachari, Seokgu Yun

Published in: Handbook on Blockchain

Publisher: Springer International Publishing

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Abstract

In the wake of financial crises, stablecoins are gaining adoption among digital currencies. We discuss how stablecoins help reduce the volatility of cryptocurrencies by surveying different types of stablecoins and their stability mechanisms. We classify different approaches to stablecoins in three main categories (i) fiat or asset backed, (ii) crypto-collateralized, and (iii) algorithmic stablecoins, giving examples of concrete projects in each class. We assess the relative tradeoffs between the different approaches. We also discuss challenges associated with the future of stablecoins and their adoption, their adoption and point out future research directions.

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Title: Stablecoins: Reducing the Volatility of Cryptocurrencies
Authors: Ayten Kahya
Bhaskar Krishnamachari
Seokgu Yun
Publisher: Springer International Publishing
Book: Handbook on Blockchain
Print ISBN: 978-3-031-07534-6

Electronic ISBN: 978-3-031-07535-3

Copyright Year: 2022
DOI: https://doi.org/10.1007/978-3-031-07535-3_14

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