---
title: Stablecoin Architecture, Digital Dollarization, and the New Triffin Dilemma
url: https://www.ml-quant.com/papers/repec/gwc-wpaper-2026-015/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-11-06
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: RePEc:gwc:wpaper:2026-015
source_url: https://econpapers.repec.org/RePEc:gwc:wpaper:2026-015
featured: 2026-11-06
citations: unknown
topic: Crypto & DeFi
---


# Stablecoin Architecture, Digital Dollarization, and the New Triffin Dilemma

Model shows that stablecoin design cannot remove peripheral currency risk but redeploys it; a new Triffin dilemma emerges where the issuer's capital must grow with its open position.

- Source: https://econpapers.repec.org/RePEc:gwc:wpaper:2026-015
- Identifier: RePEc:gwc:wpaper:2026-015
- Released: 2026-11-02
- First featured: Quant Letter No. 138 (2026-11-06): https://www.ml-quant.com/issues/2026-11-06/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Crypto & DeFi
- Authors: Silvia Sgherri

## Related

- [Banking 2.0: The Stablecoin Banking Revolution - How Digital Assets Are Reshaping Global Finance](https://www.ml-quant.com/papers/arxiv/2508.11395/): Stablecoins, combining cryptocurrency and traditional finance, are poised to transform the global financial system by addressing flaws in current fiat currencies and promoting a more globally connected financial system.
- [Mitigating Financial Frictions in Agriculture: A Framework for Stablecoin Adoption](https://www.ml-quant.com/papers/arxiv/2507.14970/): Stablecoins Solution: Fiat-collateralized stablecoins, a type of digital currency, could help solve financial issues in the global agricultural sector by reducing trade costs, increasing supply chain efficiency, and broadening credit access.
- [Stablecoins and Differences in Their Volatilities](https://www.ml-quant.com/papers/ssrn/4818228/): Stablecoins, digital assets tied to stable currencies, do not always deliver on their promise of stability, with volatility varying based on analysis frequency.
- [Stablecoins and the Emerging Hybrid Monetary Ecosystems](https://www.ml-quant.com/papers/arxiv/2505.10997/): Stablecoins, valued over USD 200 billion by 2025, are crucial to the global monetary structure, and a combined model of decentralized finance and payment innovation could improve financial inclusivity and resilience in digital ecosystems.
- [The Stablecoin Discount: Evidence of Tether's U.S. Treasury Bill Market Share in Lowering Yields](https://www.ml-quant.com/papers/arxiv/2505.12413/): Tether, the biggest stablecoin, holds a large portion of U.S. Treasury bills, affecting their yields and potentially lowering sovereign funding costs, showing the influence of stablecoin demand on financial markets.
- [No Questions Asked: Effects of Transparency on Stablecoin Liquidity During the Collapse of Silicon Valley Bank](https://www.ml-quant.com/papers/arxiv/2407.11716/): The study shows that in times of market instability, the transparency of the USDC cryptocurrency leads to quick market responses, while the lack of transparency of USDT acts as a buffer against immediate effects. This suggests that investors may seek safety in less transparent cryptocurrencies during turbulent times.