A single fiat currency refers to a national currency, like the US dollar or Euro, issued and backed by a government. This currency is not backed by a physical commodity but rather by the issuing government’s credit and regulatory power. It serves as legal tender within its jurisdiction and is the primary medium of exchange, unit of account, and store of value. Stablecoins often peg their value to a single fiat currency to achieve price stability in the digital asset space.
Context
In crypto news, the concept of a single fiat currency is central to discussions about stablecoins and central bank digital currencies (CBDCs). Reports frequently examine how stablecoins maintain their peg to a specific fiat currency and the regulatory oversight required. The potential for a digital version of a single fiat currency, like a digital dollar, is a key area of policy debate and technological exploration globally.
Stablecoin issuers face renewed scrutiny as the EBA defends prudential standards, blocking amendments that would have introduced material reserve liquidity risk.
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