# kaal:claim:3402701-003

**Claim.** 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.

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

**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 - First Order Principles* (2019), 1 INTRODUCTION, page 6

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

**Verify.** sha256 of source PDF `72ed2581b4cac2bd18a5b2640be959487a3cbc34c86ab5e5664924bcdb53c8e0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Stable%20Cryptocurrencies%20-%20First%20Order%20Principles.pdf

**Topics.** tokenomics

**Keywords.** fiat-collateralization, cost-of-capital, stablecoin-design, interest-rates

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3396522-011

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