# kaal:claim:4033886-033

**Claim.** The stablecoin exists as a response to digital asset price volatility: it is pegged to the value of an external asset, frequently a fiat currency.

**Type.** definitional  **Support.** argued

**Holds when.**

- stablecoins pegged to external assets

**Source quote.**

> To reduce price volatility in digital assets, the stablecoin was born. A stablecoin is pegged to the value of an external asset (frequently fiat currency).126

**From.** Wulf A. Kaal, Samuel Evans, Hayley Howe, *Digital Asset Valuation* (2022), IV.2.a Market Approach, page 31

**Cite as.** Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

**Verify.** sha256 of source PDF `52ba05b1292b1be4bfaf1ee5cf56b14fea9c196d870603e794d7ee316df129bd` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20et%20al.%20-%202022%20-%20Digital%20Asset%20Valuation.pdf

**Topics.** tokenomics

**Keywords.** stablecoins, volatility, pegging, digital-assets

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