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How Can Stablecoins Mitigate Some of the Risks in Cross-Exchange Arbitrage?

Stablecoins reduce volatility risk during fund transfers and simplify capital management, but carry de-pegging risk.
Greeks.Live23.11.25

How Can Stablecoins Mitigate Some of the Risks in Cross-Exchange Arbitrage?

Stablecoins, being pegged to a fiat currency like USD, reduce the volatility risk associated with holding the asset during fund transfers. They provide a reliable medium of exchange for moving value between exchanges with less price fluctuation risk than volatile cryptocurrencies.

Using stablecoins can also simplify the profit calculation and capital allocation across different exchanges. However, they introduce the risk of 'de-pegging.'

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