Stanford Journal of Blockchain Law & Policy (2019)


The emergence and proliferation of stable cryptocurrencies necessitate the establishment of first order design principles for stable cryptocurrencies. After highlighting the benefits of stable cryptocurrencies for monetary policy making, overall market stability, and their impact on the emergence of decentralized commerce, the authors introduce First Order Principles for stable cryptocurrency design and their essential functions. The core design features and their interoperative feedback effects revolve around: (1) burning coins through bonds vs. reserves, (2) transaction vs. holding taxes, (3) repegging, and (4) governance.

Keywords: table Cryptocurrencies, Liquidity, Corruption, Cost, Speculation, Inflation, Price Stability, Transparency, Feedback Effects, Market Stability, Stability Mechanisms, Monetary Policy, Emerging Technology, Crypto Economics, Token Models, Incentive Design, Velocity, Supply, Demand, Tokens, Blockchain,

JEL Classification: K20, K23, K32, L43, L5, O31, O3

Calcaterra, Craig and Kaal, Wulf A. and Rao, Vadhindran K., Stable Cryptocurrencies – First Order Principles (June 11, 2019). Stanford Journal of Blockchain Law & Policy (2019). Available at SSRN: or


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