Dr. Bhaskar Dasgupta, Chairman, Middle East Stablecoin Association
Linkages Between Sovereign Debt and Digital Yield Pools
An NBER working paper, Demand for Safety in the Crypto Ecosystem, analyzing over 41,000 weekly observations across 372 DeFi lending pools demonstrates that the premium attached to stablecoin lending deposits tracks the premium on United States Treasuries. However, during market stress, de-pegging events, or smart contract exploits, investors reduce the safety value attributed to these deposits. A stablecoin’s money-like properties depend on the combined performance of its reserves, issuer, redemption mechanisms, protocol safety, and underlying smart contracts.
Constructing Local Trust Architecture in the GCC
Because GCC economies operate within monetary frameworks tied to the US dollar, stablecoins provide new transmission channels for existing dollar relationships. The strategic priority for the UAE and wider region extends beyond issuing AED or local currency tokens; it requires establishing robust reserve management, redemption liquidity, banking integrations, custody infrastructure, and regulatory confidence to ensure these instruments maintain steady value under all market conditions.
The US Treasury Tether: Trust Architecture in Stablecoin Yields
Dr. Bhaskar Dasgupta, Chairman, Middle East Stablecoin Association
Linkages Between Sovereign Debt and Digital Yield Pools
An NBER working paper, Demand for Safety in the Crypto Ecosystem, analyzing over 41,000 weekly observations across 372 DeFi lending pools demonstrates that the premium attached to stablecoin lending deposits tracks the premium on United States Treasuries. However, during market stress, de-pegging events, or smart contract exploits, investors reduce the safety value attributed to these deposits. A stablecoin’s money-like properties depend on the combined performance of its reserves, issuer, redemption mechanisms, protocol safety, and underlying smart contracts.
Constructing Local Trust Architecture in the GCC
Because GCC economies operate within monetary frameworks tied to the US dollar, stablecoins provide new transmission channels for existing dollar relationships. The strategic priority for the UAE and wider region extends beyond issuing AED or local currency tokens; it requires establishing robust reserve management, redemption liquidity, banking integrations, custody infrastructure, and regulatory confidence to ensure these instruments maintain steady value under all market conditions.