A Note on Stablecoins

Emir Hrnjic, Ben Wee

Product #:W37535

Supplier:Ivey/NUS

Discipline:Finance

Setting:2024

Details:Note (PDF) • 11 pages • 2024-09-25

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Financial service sector

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Stablecoins represent digital assets whose value is pegged to that of a fiat currency, commodity, or financial instrument. As non-volatile assets that enable relatively easy cross-border transfers and minimal price fluctuation relative to the reference asset, stablecoins are especially useful as a medium of exchange.

Learning Objectives

The note can be used in any MBA or undergraduate finance course that includes topics on innovations in finance, especially in Corporate Finance, Financial Institutions, Banking, or Financial Markets. It can also be used in standard FinTech course or more specialized blockchain course. Students will learn the following:

Benefits and risks of stablecoins.
Stablecoin design including the economics behind design decisions, and different types of stablecoins.
Uses of collateral.
Recent incidents with stablecoins.