Automated Market-Making for Fiat Currencies

Automated Market-Making for Fiat Currencies

We present an automated market-making (AMM) cross-settlement mechanism for digital assets on interoperable blockchains, focusing on central bank digital currencies (CBDCs) and stable coins. We develop an innovative approach for generating fair exchange rates for on-chain assets consistent with tradi...

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Hauptverfasser: Lipton, Alex, Sepp, Artur
Format: Artikel
Sprache:eng
Schlagworte:
Quantitative Finance - Trading and Microstructure
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Beschreibung
Zusammenfassung:We present an automated market-making (AMM) cross-settlement mechanism for digital assets on interoperable blockchains, focusing on central bank digital currencies (CBDCs) and stable coins. We develop an innovative approach for generating fair exchange rates for on-chain assets consistent with traditional off-chain markets. We illustrate the efficacy of our approach on realized FX rates for G-10 currencies.
DOI:10.48550/arxiv.2109.12196