Stablecoin
A token designed to hold a constant value against a reference currency, most often by holding reserves in that currency.
The design question is what stands behind the peg and who can be made to honour it. Reserve-backed issuance is the version regulators have converged on: assets held against tokens issued, with redemption rights, governance and anti-money-laundering controls attached to a licence.
Where the interesting activity now is
Not in the instrument but in distribution. A licensed issuer is one thing; a bank willing to hand the token to institutional clients for treasury operations and cross-border payments is another, and it is the second that turns a stablecoin into a payment rail.
What to check in any such arrangement
- Who issues, under what licence, in which jurisdiction.
- What the reserves are and who attests to them.
- Whether the distributor has an ownership interest in the issuer — common in payment infrastructure, and not the same as an arm's-length endorsement.
- What redemption looks like on a bad day rather than a normal one.