Is the Market Success of Dominant Stablecoins Justified by Their Collateral and Concentration Risks?

Sobański, Konrad; Świder, Wojciech; Włosik, Katarzyna; Łęt, Blanka

doi:10.1007/978-3-031-30061-5_15

Cited by 1 publication

(1 citation statement)

References 20 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The first step is to ensure that the operator of the digital currency has sufficient backing (Baughman & Flemming, 2023). Another measure to reduce risk may be to increase the transparency of company balance sheets (Liao & Caramichael, 2022;Sobański et al, 2023). While stablecoins face regulatory hurdles arising from banking, financial monitoring, and security laws (Clark et al, 2020), in some cases because these regulations do not apply to stablecoins, other authors indicate that nine of the eleven fiat-backed stablecoins meet the objective requirements for cash equivalents and could be reported as such under the IFRSs (Hampl & Gyönyörová, 2021;Muhetaer, 2022).…”

Section: Resultsmentioning

confidence: 99%

The asset-backing risk of stablecoin trading: the case of Tether

Fernández,

Alonso

2024

EBR

View full text Add to dashboard Cite

This article aims to analyse the asset-backing risk of stablecoins, focusing on international accounting standards, classification criteria, and auditing standards and using Tether as a case study. It examines Tether’s issuance, backing, controls, ratios, and regulations to assess risk transmission and mitigation. The results suggest a need for unified and strengthened accounting and auditing standards to enhance user confidence. Liquidity, solvency, and debt ratios were applied to Tether's balance sheets; while Tether has made efforts to increase its transparency, and although it possesses highly liquid assets, challenges remain regarding its liquidity, solvency, and debt. An independent auditors' valuation is crucial for investor confidence, demonstrating that more specific regulations are required for stablecoins. Future research should explore other stablecoins to comprehensively understand the accounting and auditing challenges in the field.

show abstract