BERKELEY, CALIFORNIA ¨C While the mania for cryptocurrencies may have peaked, new units continue to be announced, seemingly by the day. Prominent among the new arrivals are so-called stable coins. Bearing names like Tether, Basis and Sagacoin, their value is rigidly tied to the dollar, the euro or a basket of national currencies.
It¡¯s easy to see the appeal of these units. Viable monies provide a reliable means of payment, unit of account and store of value. But conventional cryptocurrencies, such as bitcoin, trade at wildly fluctuating prices, which means that their purchasing power ¡ª their command over goods and services ¡ª is highly unstable. Hence they are unattractive as units of account.
No grocer in his right mind would price the goods on his shelves in bitcoin. No worker would want a long-term employment contract that paid her a fixed number of those units.
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