Stablecoin
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Cryptoassets - volatility.
A stablecoin is usually a privately issued cryptoasset that aims to provide price stability by backing the coin with other assets.
- Banks use stablecoins - design, regulation & risks
- "... various banks and other traditional payment service providers [have] started to use stablecoins for their activities or to issue stablecoins to their customers...
- In August 2023, PayPal launched a USD-based stablecoin (PYUSD) with Paxos.
- In addition, in September 2023, Visa announced it was expanding its stablecoin settlement capabilities with USD Coin (USDC) issued by Circle to merchant acquirers.
- These initiatives show that stablecoins are no longer the sole domain of cryptoasset providers and may boost the uptake of stablecoins for payments outside the crypto ecosystem.
- If not properly designed and regulated, the large-scale use of stablecoins for payments could have serious implications for the safety and efficiency of payment ecosystems."
- BIS survey on central bank digital currencies and crypto - Naresh Aggarwal, ACT Associate Director, Policy & Technical, 19 July 2024.
- Not all stablecoins are equally stable
- "The umbrella term ‘stablecoin’ has been used to describe a range of instruments with quite different characteristics.
- In particular, they may be backed by a range of financial assets, commodities or unbacked cryptoassets (which in some cases are supported by algorithmic protocols).
- The robustness of those backing assets and the wider safeguards for guaranteeing stability of value vary significantly across the products labelled as stablecoins."
- Sir Jon Cunliffe, Bank of England Deputy Governor for Financial Stability - Innovate Finance Global Summit - 17 April 2023.
- CBDC pilot
- "Le Banque de France announced on January 19 that a pilot saw 2 million euro worth of simulated shares purchased and sold by investors using a CBDC.
- It took place with distributed ledger technology provided by SETL — a UK-based regulated blockchain services provider - which also provided the CBDC stablecoin."
- Association of Corporate Treasurers Payments landscape blog, Naresh Aggarwal, Associate Director, Policy & Technical, 20 January 2021.
See also
- Algorithm
- Altcoin
- Asset-referenced token (ART)
- Bank for International Settlements (BIS)
- Bitcoin
- Blockchain
- Britcoin
- Central bank digital currency (CBDC)
- Commodity
- Cryptoassets
- Cryptocurrency
- Cryptography
- Distributed ledger
- E-money token (EMT)
- Ecosystem
- Fiat currency
- Financial asset
- Intangible assets
- Internal Crypto-Assets Task Force
- Monetary policy
- Money
- PayPal USD (PYUSD)
- Peg
- Protocol
- Regulation
- Ripple
- Risk management
- Token
- Treasury
- Unbacked
- USD Coin (USDC)
- Volatility
