Noncompliant Stablecoins

Definition ∞ Noncompliant Stablecoins are digital assets designed to maintain a stable value relative to a fiat currency or other asset but do not adhere to existing or proposed regulatory standards. These stablecoins may lack sufficient reserves, transparency in their backing, or appropriate governance structures. Their operation could pose risks to financial stability and consumer protection.
Context ∞ News frequently covers regulatory bodies issuing warnings or taking enforcement actions against Noncompliant Stablecoins. The collapse of certain stablecoin projects has intensified scrutiny, prompting calls for comprehensive regulatory frameworks globally. Discussions often center on the need for stablecoin issuers to provide verifiable audits and maintain robust, segregated reserves to meet prudential requirements.