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10 november 2020 Onderzoek

This paper draws lessons on the central bank underpinnings of money from the rise and fall of the Bank of Amsterdam (1609–1820). The Bank started out as a “stablecoin”: it issued deposits backed by silver and gold coins, and settled payments by transfers across deposits. Over time, it performed functions of a modern central bank and its deposits took on attributes of fiat money. The economic shocks of the 1780s, large-scale lending and lack of fiscal support led to its failure. Using monthly balance sheet data, we show how confidence in Bank money gave way to a run equilibrium, where the fall of the premium on deposits over coins (“agio”) into negative territory was swift and precipitous. This holds lessons for the governance of digital money.
Keywords: stablecoins, crypto-assets, central banks, money. 
JEL classifications: E42, E58, N13.

Working Paper no. 696

696 - An early stablecoin? The Bank of Amsterdam and the governance of money



  • Jon Frost
  • Hyun Song Shin
  • Peter Wierts