Ferrari Minesso, M., "Private Money and Public Debt. U.S. Stablecoins and the Global Safe Asset Channel"

Title: "Private Money and Public Debt. U.S. Stablecoins and the Global Safe Asset Channel" 
(with Daniele Siena)

Speaker: Dr. Massimo Ferrari Minesso, European Central Bank

Host:  Assistant Professor Kospentaris Ioannis, Department of Economics, Athens University of Economics and Business

Time: 13.30 -15.00

Room:  76, Patission Str., Antoniadou Wing, 3rd floor, Room A36

Abstract: This paper studies the international macro-financial implications o f U .S. dollar-backed payment stablecoins. These digital assets create a new global safe asset channel that links private money creation and global payment needs directly to U.S. public debt. By reshaping the demand for safe assets and the geography of dollar intermediation, stablecoins transform the dynamics of global financial markets, generating new trade-offs, also for the U .S.: while stablecoins increase the global footprint o f t he U .S. dollar and lower the level of U.S. risk-free yields, there are also costs for the issuing country. Stablecoins dampen the domestic real effects of U.S. monetary policy and increase U.S. and foreign exposure to cross-country shocks. These effects are limited a t l ow adoption levels but rise non-linearly with stablecoin capitalization.