Fiat-Backed Tokens

Definition ∞ Fiat-backed tokens are a type of stablecoin whose value is pegged to a specific fiat currency, such as the US dollar, through reserves held by an issuing entity. These tokens aim to provide price stability in the volatile digital asset market. They offer a digital representation of traditional money on a blockchain.
Context ∞ Fiat-backed tokens are a central point of regulatory focus due to concerns about reserve transparency and potential systemic risks. News reports often detail new regulations or audits aimed at ensuring these tokens are adequately collateralized and managed responsibly. Their increasing use in decentralized finance and international commerce highlights the need for clear oversight to maintain financial stability.

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→US Digital Currency

→Federal Licensing Framework

→Consumer Protection

US FDIC Prepares Stablecoin Licensing Framework under GENIUS Act

Issuers must now architect compliance systems for federal licensing, reserve management, and capital standards by the new prudential deadlines.

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→Statutory Guardrails

→Asset Segregation

→Congressional Action

Congress Passes GENIUS Act Establishing Federal Stablecoin Licensing and Reserve Requirements

The GENIUS Act codifies a federal stablecoin framework, mandating 1:1 reserve backing and licensing, structurally integrating payment tokens into the US financial system.

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→Digital Asset Policy

→Systemic Risk Mitigation

→Liquidity Management

Bank of England Proposes Systemic Stablecoin Rules Mandating Central Bank Deposits

Systemic stablecoin issuers must now integrate BoE reserve mandates, fundamentally altering liquidity management and operational risk models for UK-pegged assets.

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→Settlement

→Payments

→Commercial Bank Money

Swiss Banks Pilot DLT for Near-Real-Time Fiat Cross-Border Settlement

DLT integration into core banking systems enables compliant, 24/7 cross-currency settlement, drastically reducing counterparty risk and operational friction in global payments.

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→Fiat-Backed Tokens

→Capital Adequacy

→Consumer Protection

Hong Kong Mandates HKD 25 Million Minimum Capital for Stablecoin Issuers

The new HKMA fiat-backed stablecoin regime operationalizes reserve quality and financial stability requirements, mandating HKD 25 million minimum capital.

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→Digital Currency

→Capital Requirements

→Operational Resilience

Bank of England Proposes 40% Unremunerated Deposit Rule for Systemic Stablecoins

Systemic stablecoin issuers must now model a 40% capital allocation to unremunerated central bank deposits, fundamentally altering liquidity strategy.

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→Digital Assets Regulation

→Systemic Stablecoins

→Wholesale Settlement

Bank of England Mandates Specific Reserve Composition for Systemic Stablecoins

Systemic stablecoin issuers must re-architect reserve frameworks to meet the 40% central bank deposit mandate, fundamentally altering capital strategy.

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→Digital Asset Utility

→Enterprise Payment Rails

→Digital Asset Payments

PayPal’s PYUSD Stablecoin Drives $18.6 Billion in On-Chain Payments

The 260% volume surge validates the direct integration of fiat-backed digital assets into core payment rails, enhancing settlement efficiency and global reach.

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→UK Financial Law

→Liquidity Requirements

→Sterling Stablecoin Reserves

Bank of England Proposes Reserve Rules for Systemic Sterling Stablecoins

The BoE's proposed 60% Gilt and 40% central bank reserve mandate fundamentally re-architects systemic stablecoin issuance risk and liquidity requirements.