paper, or sovereign debt) or other digital assets.
“Algorithmic” stablecoins purport to rely, in
whole or in part, on automated adjustments or incentives for market participants to, at least
issuer of the stablecoin, other intermediaries may be important to a stablecoin’s functioning.
provider to hold the cryptographic keys associated with their stablecoins and facilitate the
such as encouraging trading by market participants.
digital assets, proponents believe that stablecoins could become used widely as a means
-
ments – including both issuers and custodial wallets – may introduce or amplify risks to the
oversight of stablecoins and stablecoin arrangements is necessary to address these risks.
Stablecoins, including algorithmic and asset-backed stablecoins,
have already shown that
-
There are no standards regarding the composition of stablecoin reserve assets, and the information made publicly
available regarding the issuer’s reserve assets is not consistent across stablecoin arrangements as to either its content
Id.
See, e.g., , supra
prudential risks. See also (Oct.
https://www.fsb.org/2020/10/regulation-supervision-and-oversight-of-global-stablecoin-arrangements/.
See, e.g.Taming Wildcat Stablecoins
), .
See, e.g., Paul Tierno, Andrew P. Scott & Eva Su, Algorithmic Stablecoins and the TerraUSD Crash,
;
Runs on Algorithmic Stablecoins: Evidence from Iron, Titan, and Steelhttps://
www.federalreserve.gov/econres/notes/feds-notes/runs-on-algorithmic-stablecoins-evidence-from-iron-ti-
; Robert Hart, Tether Untethered: World’s Biggest Stablecoin Loses $1 Peg As
Crypto Market Crashes, (May 12, 2022), https://www.forbes.com/sites/roberthart/2022/05/12/
.
The Future of Money and Payments
17