kaal:claim:3402701-003

The minimum cost of a fiat-backed token equals the interest rate of the pegged fiat currency, because the backing capital must sit idle and liquid.

Source quote, verbatim

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 - First Order Principles (2019), 1 INTRODUCTION, p. 6
https://ssrn.com/abstract=3402701 · source PDF

Cite as

Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701

Classification

mechanismsupport: arguedtokenomics

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restates kaal:claim:3396522-011 The minimum price of a fiat backed stable cryptocurrency is the interest rate of the fiat currency it is pegge...

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