April 23, 2020 A new study posits that stablecoin issuance does not cause increases in cryptoasset prices.

A new study, published on Friday, by Richard Lyons, Chief Innovation & Entrepreneurship Officer at UC Berkeley and Ganesh Viswanath-Natraj, Assistant Professor of Finance at Warwick Business School, posits that stablecoin issuance does not inflate cryptoasset prices. Acknowledging that their conclusions are not within the mainstream of prior stablecoin research, the authors argue that stablecoin issuance is driven by a demand for safe havens within the cryptoasset markets and market participants performing arbitrage between trading venues when stablecoins move away from their pegs. The study was funded by a research grant from the Berkeley Haas Blockchain Initiative.