Stablecoins

Definition ∞ Stablecoins are a class of digital assets designed to maintain a stable value relative to a specific asset, typically a fiat currency like the US dollar. Their value is usually pegged through various mechanisms, including collateralization or algorithmic adjustments. Stablecoins facilitate transactions and store value with reduced volatility.
Context ∞ The regulatory landscape surrounding stablecoins is currently a significant area of focus, with governments worldwide assessing their systemic importance and potential risks. Debates persist regarding reserve requirements, issuer transparency, and the appropriate classification of stablecoins within existing financial frameworks, impacting their future adoption and integration.