Forecasting macroeconomic effects of stablecoin adoption: A Bayesian approach

Martin M. Bojaj*, Milica Muhadinovic, Andrej Bracanovic, Andrej Mihailovic, Mladen Radulovic, Ivan Jolicic, Igor Milosevic, Veselin Milacic

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)


This study analyzes the effect of stablecoin adoption on key macroeconomic factors in Montenegro. The main explanation for the adoption of stablecoins is their one-to-one peg to various currencies and commodities. Previous studies have relied on the relationships among cryptocurrencies and thus could not disentangle the country-level macroeconomic effects of stablecoins from the effects of other cryptocurrencies. Using data from January 2006 to December 2019, we decompose the correlation between cryptocurrencies and their effects on the economy due to (a) shocks to stablecoins and (b) shocks to Bitcoin. Contrary to assumptions, stablecoins do not maintain their peg in “crash times” but do promote economic growth. Bitcoin's volatility deanchors investor expectations, disrupts markets, and destabilizes key macroeconomic factors. Our novel findings indicate that stablecoin adoption should not be based only on a one-to-one assumption and reveal the mechanism of key gaps by a prudential authority.

Original languageEnglish
Article number105792
Publication statusPublished - Apr 2022


  • Bitcoin
  • Connectedness
  • Forecast
  • Macroeconometrics
  • Policy objective
  • Stablecoin adoption


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