1、HOLDING STEADY:THE RISE OF STABLECOINSStablecoin Primer GRAYSCALE INSIGHTS|MARCH 2023In 1976,economist Friedrich Hayek wrote a paper titled“The Denationalization of Money,”where he argued that allowing private currencies to compete with each other would create a more stable monetary system.Hayek rea

2、soned that,unlike technology,the organic evolution of money was interrupted by the emergence of government-controlled currencies,and that government intervention in the system has led to instability and inflation.Hayek imagined a world with a competitive market for private currencies,each backed by

3、a variety of assets;a world where the value of each currency would be determined by supply and demand rather than the decisions of various sovereign entities.Today,proponents of Bitcoin like to reference Hayek.After all,the introduction of Bitcoin partially represents a move in the direction of what

4、 Hayek may have envisioned:a denationalized currency that isnt directly subject to control of a centralized entity,with a value determined by supply and demand.Though,critics note that Bitcoins volatile nature makes Bitcoin less than ideal in supporting a users daily purchasing power.Instead,we migh

5、t argue that Hayeks vision aligns closer to that of stablecoins.THE HOLY GRAILStablecoins are digital assets that are pegged to the value of a fiat currency or commodity,such as the US dollar or gold.By bringing fiat currencies,like the US Dollar,onto the blockchain,stablecoins intend to provide a f

6、ixed currency that can be traded against or used as a reliable store of value without requiring on-chain assets to be converted back into USD.“Intended”is the operative word.In the past,stablecoin projects have experienced multiple depegging events,resulting in damages that have varied from a few mi