Public perception is key for stablecoin peg – BIS paper
Market sentiment is important in determining whether currencies remain at par with fiat money
Public perceptions about the quality of bank reserves are key if the peg between a stablecoin and a fiat currency is to remain stable, research from the Bank for International Settlements (BIS) has found.
Stablecoins are crypto currencies that promise to be worth the same as, and be interchangeable with, sovereign money. However, the BIS working paper Public information and stablecoin runs, published on January 29, states that this promise has been “broken on multiple occasions”.
The paper’s
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