Author Archives: CB_admin

Revised version of Stablecoins paper

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“Stablecoins: Adoption and Fragility” (Sveriges Riksbank Working Paper No. 423; This version: 11/2025)

  • Abstract: This paper develops a payment-centric model of stablecoin runs with endogenous consumer adoption and seller acceptance, making the issuer’s liability composition an equilibrium outcome. Stablecoin fragility arises endogenously from shifts in the composition of the holder base as adoption expands across transactional environments. Broader adoption attracts users who derive lower transactional value from holding stablecoins, increasing the aggregate propensity to run and generating a destabilizing run externality that individual adoption decisions do not internalize. In addition, sellers’ multi-homing choices create uninternalized network effects that erode the transaction value of bank deposits. By linking adoption dynamics to issuer fragility, the model provides theoretical foundations for regulatory concerns about excessive stablecoin adoption and delivers novel testable implications. The analysis further shows that seigniorage and congestion effects can mitigate run risk, whereas issuer moral hazard can amplify fragility, even in the presence of regulatory disclosure. (D83, E4, G01, G28)
End of month market capitalization of top stablecoins over the period from January 2020 to August 2025. Source: coingecko.com.

Keywords: Money, payment preferences, financial stability, financial regulation.

New version of “Bank Misconduct and Online Lending”

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“Bank Misconduct and Online Lending” with Isaiah Hull (Sveriges Riksbank), Yingjie Qi (Stockholm School of Economics) and Xin Zhang (Sveriges Riksbank)

  • Abstract:

We introduce a high quality proxy for bank misconduct that is constructed from
Consumer Financial Protection (CFPB) complaint data. We employ this proxy to
measure the impact of bank misconduct on the expansion of online lending in the
United States. Using nearly complete loan and application data from the online lending
market, we demonstrate that bank misconduct is associated with a statistically and
economically signi cant increase in online lending demand at the state and county
levels. This result is robust to the inclusion of bank credit supply shocks and holds for
both broader and more narrowly-de ned bank misconduct measures. Furthermore, we
show that this e ect is strongest for lower rated borrowers and weakest in states with
high levels of generalized trust.

  • Keywords: financial development, consumer loans, bank misconduct, FinTech.