ACLE & ABS Finance Group Seminar: Iñaki Aldasoro (BIS)
Stablecoin flows and foreign exchange parity deviations in segmented markets
- Date
- 14 April 2026
- Time
- 13:00 -14:15
- Location
- Roeterseilandcampus - building M
- Room
- M0.02
Abstract
Using granular data on four USD-pegged stablecoins and 35 fiat currencies, this paper documents spillovers from stablecoin-based foreign exchange (FX) to traditional FX markets through distortions in relative pricing between crypto and traditional venues (parity deviations). To establish causality, we use a granular instrumental variable that exploits idiosyncratic shocks in other currencies.
Our estimates indicate that a 1% exogenous increase in net stablecoin inflows raises parity deviations by 40 basis points, depreciates the local currency, and widens the dollar premium in synthetic funding markets (covered interest parity (CIP) deviations). A model of constrained arbitrage rationalizes these findings and provides structural foundations for our identification strategy. Counterfactual simulations show that halving cross-market frictions would attenuate CIP spillovers by roughly one-third and cut exchange rate effects by nearly half, while a dynamic extension that closely matches the empirical impulse responses reveals scope for nonlinear amplification when intermediary balance sheets are impaired. Our results establish stablecoins as an emerging segment of global currency markets with direct implications for financial stability.
Paper can be downloaded here.
Practicalities
This event will be held in person. The seminar will take place in Roeterseiland campus (REC) building M, room number M0.02.
About the speaker
Iñaki Aldasoro is a Principal Economist at the Monetary and Economic Department of the BIS, which he joined in October 2016. Iñaki holds a PhD in economics from Goethe University Frankfurt, and also did studies at the Kiel Institute (ASP 2008-09) and the University of Buenos Aires (bachelor's and master's in economics).
About ACLE
The Amsterdam Center for Law and Economics (ACLE) is a joint initiative of the Faculty of Economics and Business and the Faculty of Law at the University of Amsterdam. The objective of the ACLE is to promote high-quality interdisciplinary research at the intersection between law and economics.