Definition ∞ Mortgage-backed securities (MBS) are financial instruments that derive their value from a pool of mortgage loans. Investors receive payments from the principal and interest paid by homeowners. These securities are a significant component of the traditional fixed-income market. While not directly digital assets, their performance can influence broader financial stability.
Context ∞ While MBS are traditional financial products, news about their performance or regulatory changes can indirectly affect digital asset markets by influencing overall financial liquidity and investor risk appetite. Reports on MBS market stability or stress may indicate shifts in the broader economic environment. Understanding MBS provides context for analyzing how traditional financial system health impacts the nascent digital economy.
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