Automated Market-Making for Fiat Currencies
Alex Lipton, and Artur Sepp
TL;DR
This paper introduces an automated market-making mechanism for digital assets like CBDCs and stablecoins, aligning on-chain exchange rates with traditional FX markets to facilitate interoperability.
Contribution
It presents a novel cross-settlement AMM approach that ensures fair exchange rates between on-chain assets and off-chain markets, specifically for digital currencies.
Findings
Effective alignment with G-10 FX rates
Demonstrated on real-world digital assets
Enhances interoperability between blockchains and traditional markets
Abstract
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.
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsBanking stability, regulation, efficiency · Financial Markets and Investment Strategies · Blockchain Technology Applications and Security