Argues stablecoins recreate the instability of the 19th-century 'wildcat' free-banking era and proposes regulating issuers like banks or issuing a CBDC.
Core to the peg-stability and regulation narratives; pair with the peg-stability score and concentration data.
Stablecoins echo the 'wildcat' free-banking era: private money that fails to trade at par is run-prone (Gorton & Zhang, 2021).
| Research question | Are privately issued stablecoins a stable form of money, and how should they be regulated? |
| Methodology | Historical-institutional analysis (analogy to the US free-banking era) |
| Limitations | Analogy-driven and normative; limited empirical estimation. |
Gary B. Gorton, Jeffery Y. Zhang (2021). Taming Wildcat Stablecoins SSRN Working Paper; later University of Chicago Law Review.
@techreport{gorton2021tamingwildcatstablecoins,
title = {Taming Wildcat Stablecoins},
author = {Gary B. Gorton and Jeffery Y. Zhang},
year = {2021},
institution = {SSRN},
howpublished = {SSRN Working Paper; later University of Chicago Law Review},
doi = {10.2139/ssrn.3888752},
url = {https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3888752},
note = {Indexed by Stablecoin Beat},
}