Stablecoins and Differences in Their Volatilities

<div> Stablecoins, digital assets pegged to fiat currencies such as the U.S. dollar, are intended to </div> <div> provide a stable store of value within the volatile cryptocurrency ecosystem. However, a key </div> <div> question persists: Are stablecoins truly stable? This study examines the short-term volatility of </div> <div> various stablecoins, each with distinct design mechanisms, comparing them both to traditional </div> <div> cryptocurrencies and to each other across multiple intraday time intervals. Despite the rapid </div> <div> growth of stablecoins, their behavior over short time horizons remains underrepresented in </div> <div> the literature. This paper proposes a standardized framework to evaluate and compare the </div> <div> short-term volatility of stablecoins, enabling users to better assess their risk exposure in high- </div> <div> frequency contexts. Empirical analysis reveals that volatility levels differ significantly not only </div> <div> between stablecoins, but also across sampling frequencies (1, 5, 10, 30, and 60 minutes). The </div> <div> findings suggest that the promise of price stability is not uniformly upheld across all stablecoins, </div> <div> particularly at higher temporal resolutions. </div>