[17] Algorithmic stablecoins, meanwhile, aim to match supply and demand to maintain a stable value. But the recent crypto crash has highlighted that – without sound regulation – stablecoins are stable in name only. Digital innovation cannot, for example, build stable values on the basis of codes and mechanisms of dependency.
Similarly, there is no guarantee that the current wave of investment will earn high returns. So a relevant forecasting question here is how these risks are likely to play out and how they are influenced by the way in which the increase in the capital stock is financed.