# kaal:claim:3396522-011

**Claim.** The minimum price of a fiat backed stable cryptocurrency is the interest rate of the fiat currency it is pegged to, because the collateral must sit liquid rather than earn a return.

**Type.** mechanism  **Support.** argued

**Holds when.**

- applies to fully collateralized fiat backed tokens

**Source quote.**

> Therefore, the price tag of fiat-backed tokens is, at a minimum, the interest rate of the pegged fiat currency.

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Stable Cryptocurrencies* (2019), IV. Stable Cryptocurrencies, page 24

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies (2019). SSRN: https://ssrn.com/abstract=3396522

**Verify.** sha256 of source PDF `ef5031b16aa53476ed618f0bdf92601cd4affb893692c701134bd9cba3ea8acf` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Stable%20Cryptocurrencies.pdf

**Topics.** tokenomics

**Keywords.** collateralization, cost-of-capital, interest-rate, stablecoins, peg-design

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3402701-003

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.