{{Short description|Type of cryptocurrency that is reserve backed}} {{pp-extended|small=yes}} {{Use dmy dates|date=December 2024}}
[[File:Over-the-counter-crypto-exchange.jpeg|thumb|alt=An over-the-counter stablecoin exchange|An over-the-counter stablecoin exchange in Hong Kong]]
A '''stablecoin''' is a type of cryptocurrency that aims to maintain a stable value relative to a specified asset, a pool or basket of assets. The specified asset might refer to fiat currency, commodity, or other cryptocurrencies.<ref name="Bank of England-2023">{{Cite web |date=2023-11-06 |title=What are stablecoins and how do they work? |url=https://www.bankofengland.co.uk/explainers/what-are-stablecoins-and-how-do-they-work |access-date=2025-08-01 |website=Bank of England |language=en}}</ref><ref>{{Cite journal |date=2024-02-29 |title=Recommendations for the Regulation, Supervision and Oversight of Global Stablecoin Arrangements - Executive Summary |url=https://www.bis.org/fsi/fsisummaries//global_stablecoins.htm |journal=Bank for International Settlements - Financial Stability Institute |language=en |via=FSI Connect}}</ref> Despite the name, stablecoins are not necessarily stable. Stablecoins rely on stabilization tools such as reserve assets or algorithms that match supply and demand to try to maintain a stable value.<ref name="Adachi-2022" />
Historically, multiple stablecoins have failed to maintain their value relative to the underlying assets. With a growing number of market transactions involving stablecoins, their issuance and usage are increasingly regulated by governments around the world.
== Background == Stablecoins emerged in 2014 as a method for investors in cryptocurrencies to park their money when they invest in other highly volatile cryptocurrencies.<ref name="Towfighi-2025" /><ref name="Dionysopoulos-2024">{{Cite journal |last1=Dionysopoulos |first1=Lambis |last2=Urquhart |first2=Andrew |date=2024-11-01 |title=10 years of stablecoins: Their impact, what we know, and future research directions |journal=Economics Letters |volume=244 |article-number=111939 |doi=10.1016/j.econlet.2024.111939 |issn=0165-1765|doi-access=free }}</ref> Stablecoins are now mainly used for buying or selling cryptoassets, and for making cross-border payments.<ref name="Bank of England-2023" /> According to the Bank for International Settlements in July 2025, 90% of the market capitalization of stablecoins was either in Tether or USDC.<ref name="Aldasoro-2025">{{Cite journal |last1=Aldasoro |first1=Iñaki |last2=Aquilina |first2=Matteo |last3=Lewrick |first3=Ulf |last4=Lim |first4=Sang Hyuk |date=2025-07-11 |title=Stablecoin growth － policy challenges and approaches |url=https://www.bis.org/publ/bisbull108.pdf |journal=BIS Bulletin |language=en |issue=108 |page=2}}</ref>{{rp|4}} According to the Financial Action Task Force, the market capitalization of stablecoins reached $316 billion in October 2025, while daily trading volume reached $156 billion. Within the stablecoin market, 95% of them are backed by fiat currency, while 97% among those fiat currency-backed stablecoins are denominated in US dollar.<ref name="Financial Action Task Force-2024" />{{rp|11}}
== Types of stablecoin == [[File:Stablecoin logos montage.svg|thumb|Some logos of well known stablecoins: USDT, DAI, USDC, and TerraUSD ]] === Fiat-backed stablecoins ===
Fiat-backed stablecoins are stablecoins that claim to be backed by assets denominated in a fiat currency. The value of a fiat-backed stablecoin is based on the value of the backing currency, which is supposedly held by a third party custodian. The issuer defends the peg of the stablecoin by holding mostly fiat-denominated short-term assets, such as treasury bonds, high-quality commercial paper, repurchase agreements and bank deposits. Therefore, the structure of fiat-backed stablecoins closely resembles that of money market funds (MMFs), and they are exposed to similar risk of large-scale redemption requests causing negative fire-sale contagion effects on the financial system.<ref name="Aldasoro-2024">{{Cite journal |last1=Aldasoro |first1=Iñaki |last2=Cornelli |first2=Giulio |last3=Minesso |first3=Massimo Ferrari |last4=Gambacorta |first4=Leonardo |last5=Habib |first5=Maurizio Michael |date=2024 |title=Stablecoins, Money Market Funds and Monetary Policy |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4979553 |journal=SSRN Electronic Journal |doi=10.2139/ssrn.4979553 |ssrn=4979553 |issn=1556-5068}}</ref><ref name="Adachi-2021">{{Cite journal |last1=Adachi |first1=Mitsutoshi |last2=Born |first2=Alexandra |last3=Gschossmann |first3=Isabella |last4=van der Kraaij |first4=Anton |date=2021-11-17 |title=The expanding uses and functions of stablecoins |url=https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2021/html/ecb.fsrbox202111_04~45293c08fc.en.html |journal=Financial Stability Review, November 2021 |language=en |via=ECB}}</ref>
As of October 2025, nearly 97% of fiat-backed stablecoins are pegged to the US dollar.<ref name="Financial Action Task Force-2024" /> Major examples of US-dollar-pegged stablecoins are Tether's USDT and Circle's USDC.<ref>{{Cite journal |last1=Baughman |first1=Garth |last2=Carapella |first2=Francesca |last3=Gerszten |first3=Jacob |last4=Mills |first4=David C. |date=2022-12-16 |title=The stable in stablecoins |url=https://www.federalreserve.gov/econres/notes/feds-notes/the-stable-in-stablecoins-20221216.html |journal=FEDS Notes |issue=12/17/2022 |doi=10.17016/2380-7172.3224 |issn=2380-7172 |via=The Federal Reserve|quote=...as illustrated in Figure 1, with Tether (blue) and USD Coin (brown) accounting for the largest market capitalization as of November 10, 2022.}}</ref> For Euro-pegged stablecoins, examples include Circle's EURC,<ref>{{Cite web |last=Asgari |first=Nikou |date=2025-08-22 |title=EU speeds up plans for digital euro after US stablecoin law |url=https://www.ft.com/content/8ad60169-d1e5-4d2c-b928-d53d668f0ec6 |access-date=2025-08-23 |website=Financial Times |quote=Several euro-denominated stablecoins have been launched, the largest of which is run by Circle and has a market capitalisation of $225mn.}}</ref> EUR Tether, and Stasis EUR.<ref>{{Cite journal |last=Lagarde |first=Christine |date=2022-06-14 |title=The international role of the euro, June 2022 |url=https://www.ecb.europa.eu/press/other-publications/ire/html/ecb.ire202206~6f3ddeab26.en.html |journal=The International Role of the Euro |language=en |issue=June 2022 |doi=10.2866/7881574 |doi-broken-date= |issn=1725-6593 |via=European Central Bank|quote=The market for euro-denominated stablecoins is also dominated by two large coins, EUR Tether and Stasis euro, that together account for about half of the total.}}</ref>
=== Cryptocurrency-backed === Cryptocurrency-backed stablecoins are stablecoins using other cryptocurrencies as collateral. The reason such stablecoins are created is that by utilizing smart contracts, they allow a decentralized network to track the price of the US dollar as closely as possible. Another use case of cryptocurrency-backed stablecoins is to convert a cryptocurrency into ERC20 compatible standard to enable trading on another blockchain.<ref>{{Cite journal |last1=Lyons |first1=Richard K. |last2=Viswanath-Natraj |first2=Ganesh |date=2023-03-01 |title=What keeps stablecoins stable? |url=https://www.sciencedirect.com/science/article/pii/S0261560622001802 |journal=Journal of International Money and Finance |volume=131 |article-number=102777 |doi=10.1016/j.jimonfin.2022.102777 |issn=0261-5606}}</ref>
=== Commodity-backed stablecoins === Commodity-backed stablecoins are stablecoins that claim to be backed by commodities. Examples are PAX Gold and Tether Gold.<ref name="Kosse-2023">{{Cite journal |last1=Kosse |first1=Anneke |last2=Glowka |first2=Marc |last3=Mattei |first3=Ilaria |last4=Rice |first4=Tara |date=2023 |title=Will the real stablecoin please stand up? |url=https://ideas.repec.org//b/bis/bisbps/141.html |journal=BIS Papers |language=en}}</ref>
=== Algorithmic stablecoin === Algorithmic stablecoins, sometimes called seigniorage-style stablecoin, are stablecoins with no reserve assets or only partial reserve assets. They utilize algorithms that match supply and demand to maintain a stable value. The European Central Bank suggests that algorithmic stablecoins should be treated as unbacked crypto-assets.<ref name="Adachi-2022" /> Some major examples of algorithmic stablecoins are Celo Dollar, Tron's USDD and Kava's USDX.<ref name="Krause-2025">{{Cite journal |last=Krause |first=David |date=2025 |title=Algorithmic Stablecoins: Mechanisms, Risks, and Lessons from the Fall of TerraUSD |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5092827 |access-date=2025-08-03 |website=SSRN |doi=10.2139/ssrn.5092827 |ssrn=5092827 }}</ref>
== Uses of stablecoins == === Convenience for cryptocurrency users === Stablecoins provide convenience for investors in cryptocurrencies, as a simpler way to buy and sell other more volatile cryptocurrencies.<ref name="Adachi-2022">{{Cite journal |last1=Adachi |first1=Mitsu |last2=Da Silva |first2=Pedro Bento Pereira |last3=Born |first3=Alexandra |last4=Cappuccio |first4=Massimo |last5=Czák-Ludwig |first5=Stephanie |last6=Gschossmann |first6=Isabella |last7=Pellicani |first7=Antonella |last8=Philipps |first8=Sarah-Maria |last9=Plooij |first9=Mirjam |last10=Rossteuscher |first10=Ines |last11=Zeoli |first11=Pierfrancesco |date=2022-07-11 |title=Stablecoins' role in crypto and beyond: functions, risks and policy |url=https://www.ecb.europa.eu/press/financial-stability-publications/macroprudential-bulletin/html/ecb.mpbu202207_2~836f682ed7.en.html |journal=Macroprudential Bulletin |language=en |issue=18 |via=ECB}}</ref><ref name="Towfighi-2025">{{Cite news |last=Towfighi |first=John |date=2025-06-05 |title=What are stablecoins? Everything to know about the crypto being debated in Congress |url=https://www.cnn.com/2025/06/05/business/stablecoins-crypto-genius-act |access-date=2025-07-31 |work=CNN Business |language=en}}</ref> ''Planet Money'' has described this use of stablecoins as similar to casino chips, as they simplify buying and selling other cryptocurrencies before eventually being traded for money.<ref>{{cite news |last1=Nam |first1=Rafael |title=Why there's so much excitement around a cryptocurrency called stablecoin |url=https://www.npr.org/2025/07/15/nx-s1-5467380/crypto-stablecoin-genius-act-congress |access-date=9 March 2026 |work=NPR |date=15 July 2025 |language=en}}</ref>
=== Cross-border payments === According to a 2025 report from the International Monetary Fund (IMF), cross-border flows of stablecoin surpassed those of unbacked crypto assets in early 2022. According to the IMF, Asia and the Pacific region have the most stablecoin activity, while after adjusting for GDP, the majority of stablecoins flow from North America to other locations. The report estimated that stablecoin cross-border flow was $1.4 trillion dollars in 2024, compared to the global cross-border payment market of approximately one quadrillion dollars. In advanced economies, cross-border flows is dominated by traditional payment systems such as SWIFT. The largest share of stablecoins being used for cross-border transactions was among emerging markets and developing economies.<ref name="IMF-2025">{{Cite web |date=2025-12-04 |title=Understanding Stablecoins |url=https://elibrary.imf.org/view/journals/087/2025/009/087.2025.issue-009-en.xml?cid=570602-com-dsp-crossref |access-date=2026-03-10 |website=IMF |publisher=Monetary and Capital Markets Department |doi=10.5089/9798229024075.087 |p=17}}</ref>
According to a study by the University of Cambridge, the most cited reason for using stablecoins in cross-border settlement is the 24/7 settlement capability, allowing transactions to take place outside banking hours.<ref>{{Cite journal |last=Alkhair |first=Sami |last2=Bear |first2=Keith |last3=Bergvinson |first3=Markus |last4=Coelho |first4=Hugo |last5=Hussain |first5=Hatim |last6=Jones |first6=Matthew |last7=Oma |first7=Lindis |last8=Proskalovich |first8=Roman |last9=Seta |first9=Christopher |last10=Zhang |first10=Bryan Zheng |date=2026 |title=Tokenised Money: Use Cases, Interoperability and Regulation |url=https://www.ssrn.com/abstract=6407098 |journal=SSRN Electronic Journal |language=en |doi=10.2139/ssrn.6407098 |issn=1556-5068}}</ref> A 2025 study in the journal ''Telematics and Informatics'', of 866 U.S.-based adults who had sent remittances within the previous year, 26% reported using stablecoins for cross-border transfers, with 34% also using other methods.<ref name="Ante2025">{{Cite journal |last=Ante |first=Lennart |date=2025-02-01 |title=From adoption to continuance: Stablecoins in cross-border remittances and the role of digital and financial literacy |url=https://www.sciencedirect.com/science/article/pii/S0736585324001345 |journal=Telematics and Informatics |volume=97 |article-number=102230 |doi=10.1016/j.tele.2024.102230 |issn=0736-5853 |url-access=subscription }}</ref>
=== Currency substitution === According to Chainalysis, due to the volatility of the Venezuelan bolivar, some Venezuelans use US dollar-denominated stablecoins to preserve value and transact in a more stable currency.<ref>{{Cite web |last=Chinea |first=Eyanir |date=2025-01-05 |title=The new gray-area dollar in Venezuela is digital |url=https://english.elpais.com/economy-and-business/2025-01-05/the-new-gray-area-dollar-in-venezuela-is-digital.html |access-date=2025-08-04 |website=EL PAÍS English |language=en-us}}</ref> In January 2026, it was reported that US dollar-denominated stablecoins are increasingly being used in domestic transactions in Venezuela due to prolonged period of hyperinflation, sanctions, and capital controls.<ref>{{Cite web |last=Cobo |first=Maria Clara |date=2026-01-08 |title=Stablecoins Live Up To Their Billing During Venezuela Turmoil |url=https://www.bloomberg.com/news/newsletters/2026-01-08/stablecoins-live-up-to-their-billing-during-venezuela-turmoil |access-date=2026-03-19 |website=Bloomberg}}</ref>
A report by Standard Chartered warned that the prevalence of US dollar-denominated stablecoins could potentially cause $1 trillion from developing countries to flow to stablecoins, causing loss of bank deposits. The capital outflow would be caused by risk aversion of individuals within the developing countries against sudden sharp currency depreciation.<ref>{{Cite news |last=Jones |first=Marc |last2=Jones |first2=Marc |date=2025-10-07 |title=Stablecoins could suck $1 trillion from EM banks in next three years, Standard Chartered estimates |url=https://www.reuters.com/business/finance/stablecoins-could-suck-1-trillion-em-banks-next-three-years-standard-chartered-2025-10-07/ |access-date=2025-10-08 |work=Reuters |language=en}}</ref>
=== Aid distribution === Since 2019, Oxfam began distributing humanitarian aid to residents of Vanutau using US dollar stablecoins. By 2022, the project registered 35,000 people in the Pacific region and has distributed aid of around $2 million to participants.<ref>{{Cite news |last=Srinivasan |first=Prianka |date=2021-10-01 |title=Why the Pacific has become a testing ground for blockchain and cryptocurrency projects |url=https://www.abc.net.au/news/2021-10-02/pacific-blockchain-experiment-cryptocurrency-bitcoin/100495166 |access-date=2026-06-01 |work=ABC News |language=en-AU}}</ref>
The nonprofit ImpactMarket reported distributing over $1 million in Celo Dollar stablecoins to more than 18,000 beneficiaries in 102 locations in Africa, and said some local merchants had begun accepting the tokens for payments.<ref>{{Cite web |last1=Idris |first1=Abubakar |last2=Karombo |first2=Tawanda |date=2021-08-19 |title=Stablecoins find a use case in Africa's most volatile markets |url=https://restofworld.org/2021/stablecoins-find-a-use-case-in-africas-most-volatile-markets/ |access-date=2025-08-06 |website=Rest of World |language=en-US}}</ref>
== Policy and regulatory issues == === Money laundering and terrorism financing === In January 2024, the United Nations Office on Drugs and Crime (UNODC) reported that stablecoins, particularly USDT, had become the cryptocurrency of choice for organized crime groups engaged in cyberfraud and money laundering in East and Southeast Asia.<ref>{{Cite journal |date=January 2024 |title=Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden and Accelerating Threat |url=https://www.unodc.org/roseap/uploads/documents/Publications/2024/Casino_Underground_Banking_Report_2024.pdf |journal=Technical Policy Brief |via=United Nations Office on Drugs and Crime}}</ref>
Reuters reported in 2023 that groups designated as terrorist organizations by Israel, the United States and other countries were using stablecoins on the Tron blockchain instead of more volatile bitcoin tokens to preserve the value of transferred funds.<ref>{{cite news |last=Stubbs |first=Jack |title=New crypto front emerges in Israel's militant financing fight |url=https://www.reuters.com/world/middle-east/new-crypto-front-emerges-israels-militant-financing-fight-2023-11-27/ |work=Reuters |date=2023-11-27 |access-date=2026-03-11}}</ref>
The intergovernmental Financial Action Task Force (FATF) has reported that stablecoins are increasingly used for illicit financial activity, including money laundering, terrorism financing, sanctions evasion, and proliferation financing. The report states that stablecoins such as USDT (Tether) and USDC (Circle) provide a relatively stable medium for moving proceeds compared with more volatile cryptocurrencies, and that their liquidity, interoperability, and ease of cross-border transfer make them attractive for illicit use.<ref name="Financial Action Task Force-2024">{{cite report |title=Targeted Report on Stablecoins and Unhosted Wallets |publisher=Financial Action Task Force |date=2024 |url=https://www.fatf-gafi.org/content/dam/fatf-gafi/publications/targeted-report-on-stablecoins-and-unhosted-wallets.pdf |access-date=2026-03-11}}</ref>
=== Erosion of monetary sovereignty === After the passing of the GENIUS Act by the Trump administration in the United States, Jürgen Schaaf, adviser to the European Central Bank (ECB) wrote that widespread adoption of US dollar stablecoins could erode European monetary sovereignty and financial stability.<ref>{{cite web |last1=Schaaf |first1=Jürgen |title=From hype to hazard: what stablecoins mean for Europe |url=https://www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250728~e6cb3cf8b5.en.html |website=ECB blog |publisher=ECB |access-date=30 July 2025 |language=en |date=28 July 2025 |quote=The ECB believes that the wide adoption of US dollar stablecoins would provide the United States with strategic and economic advantages, allowing it to finance its debt more cheaply while exerting global influence. Europeans would experience higher borrowing costs, reduced monetary policy autonomy, and geopolitical dependency.}}</ref> Scholars in China and Singapore have both described the GENIUS Act as a strategic move to increase demand for US Treasuries and therefore an attempt to consolidate the hegemony of the US dollar.<ref>{{Cite web |last=长江 |first=杨 |date=2025-08-01 |title=杨长江：美国很少讨论一个问题，如果中国也推出稳定币会怎样？ |url=https://www.guancha.cn/yangchangjiang/2025_08_01_785105_1.shtml |access-date=2025-08-06 |website=观察者}}</ref><ref>{{Cite web |date=2025-08-03 |title=亚洲多地加速规范稳定币 可以期待更多与亚币挂钩的稳定币 |url=https://guangming.com.my/%e4%ba%9a%e6%b4%b2%e5%a4%9a%e5%9c%b0%e5%8a%a0%e9%80%9f%e8%a7%84%e8%8c%83%e7%a8%b3%e5%ae%9a%e5%b8%81-%e5%8f%af%e4%bb%a5%e6%9c%9f%e5%be%85%e6%9b%b4%e5%a4%9a%e4%b8%8e%e4%ba%9a%e5%b8%81%e6%8c%82%e9%92%a9 |access-date=2025-08-06 |website=光明日报 |language=zh-TW}}</ref> Lesetja Kganyago, Governor of South African Reserve Bank, expressed that US dollar stablecoins are being used to undermine African currencies, and is concerned that some African countries might lose their monetary sovereignty.<ref>{{Cite web |last=Mutizwa |first=Godfrey |date=2025-10-30 |title=South Africa's Kganyago warns some stablecoins may undermine African monetary authority |url=https://www.cnbcafrica.com/2025/south-africas-kganyago-warns-some-stablecoins-may-undermine-african-monetary-authority/ |access-date=2026-02-09 |website=CNBC Africa |language=en}}</ref> Agnès Bénassy-Quéré, Deputy Governor of the Banque de France, and François Villeroy de Galhau, Governor of the Banque de France, warned that Europe's monetary sovereignty is threatened by US dollar-denominated stablecoins.<ref>{{Cite web |last=Bénassy-Quéré |first=Agnès |last2=Villeroy de Galhau |first2=François |date=2025-10-19 |title=Stablecoins: « La rupture économique, ou idéologique, réside dans la privatisation possible de la monnaie » |url=https://www.lemonde.fr/idees/article/2025/10/19/stablecoins-la-rupture-economique-ou-ideologique-reside-dans-la-privatisation-possible-de-la-monnaie_6648133_3232.html |access-date=2026-03-10 |website=Le Monde}}</ref>
In March 2026, a research published by the ECB examined the effect of foreign-currency-denominated stablecoins on the monetary sovereignty of Europe. The adoption of US dollar-denominated stablecoins would import foreign monetary policies into Europe, weakening the ability of central banks to affect short-term interest rates, complicate liquidity management within the banking system, and increase exchange-rate-related volatility in funding flows. In extreme cases, it could make Europe's own monetary policy tools ineffective.<ref>{{Cite journal |last=Altavilla |first=Carlo |last2=Boucinha |first2=Miguel |last3=Burlon |first3=Lorenzo |last4=Adalid |first4=Ramon |last5=Fortes |first5=Roberta |last6=Maruhn |first6=Franziska |date=2026-03-05 |title=Stablecoins and monetary policy transmission |url=https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp3199~ad552b59ec.en.pdf?29598459ce5cb2f1d4ed056e3866255f |journal=ECB Working Paper Series |issue=3199 |pages=25-26 |via=Eurosystem}}</ref>
=== Sanction avoidance === In response to sanctions against Russian entities, A7A5, a rouble-pegged stablecoin, was launched by Promsvyazbank and Moldovan oligarch Ilan Șor. The stablecoin was used by Russian businesses to conduct cross-border payments and by the Russian state to carry out an influence campaign.<ref>{{Cite web |title=Afacerile lui Șor cu Guvernul Rusiei |url=https://www.rise.md/articol/afacerile-lui-sor-cu-guvernul-rusiei/ |access-date=2026-02-10 |website=Rise Moldova}}</ref><ref>{{Cite web |last=Ivanova |first=Polina |date=2026-02-05 |title=Inside the Russian Monopoly money network moving billions over borders |url=https://www.ft.com/content/8ea9eb6d-736a-4ccf-aa6b-3f9a9fb81294 |access-date=2026-02-10 |website=Financial Times}}</ref><ref>{{Cite web |last=Matamis |first=Joaquin |date=2025-09-25 |title=Moldova's 2025 Elections: A Test Case for Russia's Hybrid Warfare • Stimson Center |url=https://www.stimson.org/2025/moldovas-2025-elections-a-test-case-for-russias-hybrid-warfare/ |access-date=2026-02-10 |website=Stimson Center |language=en-US}}</ref>
In October 2025, the UN's Multilateral Sanctions Monitoring Team found that North Korea avoided sanctions by using stablecoin for sale and transfer of military equipment and raw materials.<ref>{{Cite news |date=2025-10-25 |title=North Korea using crypto, IT workers to dodge UN sanctions: Report |url=https://www.straitstimes.com/asia/east-asia/north-korea-using-crypto-it-workers-to-dodge-un-sanctions-report |access-date=2026-03-09 |work=The Straits Times |language=en |issn=0585-3923}}</ref> The report alleged that North Korean officials sold military-grade satellite communications systems to a buyer in Laos and a portable air defense system to a buyer in Sudan. In both cases the buyers paid in USDT.<ref>{{Cite web |date=2025-10-22 |title=The DPRK's Violation and Evasion of UN Sanctions through Cyber and Information Technology Worker Activities |url=https://msmt.info/Publications/detail/MSMT%20Report/4221 |archive-url=http://web.archive.org/web/20260312173831/https://msmt.info/Publications/detail/MSMT%20Report/4221 |archive-date=2026-03-12 |access-date=2026-03-16 |website=Multilateral Sanctions Monitoring Team |language=en}}</ref> In January 2026, it was reported that the Central Bank of Iran is accumulating stablecoins while facing sanctions against the Iranian regime.<ref>{{Cite news |last=Burgis |first=Tom |last2=Goodier |first2=Michael |date=2026-01-21 |title=Iran's central bank using vast quantities of cryptocurrency championed by Farage, says report |url=https://www.theguardian.com/world/2026/jan/21/iran-central-bank-cryptocurrency-tether-nigel-farage |access-date=2026-03-13 |work=The Guardian |language=en-GB |issn=0261-3077}}</ref>
== Financial risks and stability concerns == === De-pegging risk === While stablecoins aim to maintain the peg with underlying assets, they are constantly traded on the market and therefore subject to market volatility. A stablecoin can deviate from the peg due to a number of reasons, such as liquidity stress, increase in market demand, mismanagement of reserves, fluctuations in prices of other cryptocurrencies, design flaws of stabilization mechanic, etc.<ref>{{Cite web |title=Stablecoins: A Deep Dive into Valuation and Depegging |url=https://www.spglobal.com/en/research-insights/special-reports/stablecoins-a-deep-dive-into-valuation-and-depegging |archive-url=http://web.archive.org/web/20260102171306/https://www.spglobal.com/en/research-insights/special-reports/stablecoins-a-deep-dive-into-valuation-and-depegging |archive-date=2026-01-02 |access-date=2026-03-27 |website=S&P Global |language=en}}</ref><ref>{{Cite journal |last=Lee |first=Yi-Hsi |last2=Chiu |first2=Yu-Fen |last3=Hsieh |first3=Ming-Hua |date=2025-04-01 |title=Stablecoin depegging risk prediction |url=https://www.sciencedirect.com/science/article/pii/S0927538X24003925 |journal=Pacific-Basin Finance Journal |volume=90 |article-number=102640 |doi=10.1016/j.pacfin.2024.102640 |issn=0927-538X}}</ref><ref>{{Cite web |last=Park |first=Haerang |date=2026-03-17 |title=Commonality in stablecoin depegging |url=https://www.tandfonline.com/action/cookieAbsent |access-date=2026-03-27 |website=Applied Economics Letters |doi=10.1080/13504851.2026.2637686}}</ref>
=== Contagion risk on financial market === Since fiat-backed stablecoins are structurally similar to money market funds, they pose similar contagion risk, in which a large amount of redemption caused the selling of underlying assets, further pushing down the price of the underlying assets and creating more demand for redemption.<ref name="Aldasoro-2024" /><ref name="Adachi-2021" />
Partner banks of stablecoin issuers would also face substantial increase in liquidity risk exposure due to linkage with fiat-backed stablecoins. Unlike money market funds, stablecoins are designed to be settlement instruments, and therefore may face more rapid conversion, resulting in increased liquidity risk.<ref>{{Cite journal |last=Lee |first=Michael Junho |last2=Tou |first2=Donny |date=2026-02-01 |title=Stablecoin Disintermediation |url=https://ideas.repec.org//p/fip/fednsr/102830.html |journal=Staff Reports |language=en |via=Federal Reserve Bank of New York}}</ref>
=== Counterparty risk === Reserve-backed stablecoins require a third party custodian to hold the reserve assets to maintain price stability. The concentration of reserve deposits creates a counterparty risk in which the custodian may fail in the case of a bank run. In March 2023, the price of Circle's USDC de-pegged temporarily during the banking crisis in the United States in which Signature Bank, Silvergate Bank, and Silicon Valley Bank collapsed.<ref>{{Cite web |date=2023-03-16 |title=US Bank Failures Highlight Stablecoin Counterparty Risks |url=https://www.fitchratings.com/research/banks/us-bank-failures-highlight-stablecoin-counterparty-risks-16-03-2023 |access-date=2025-08-11 |website=Fitch Ratings}}</ref>
=== Solvency risk === Fiat-backed stablecoins maintain the peg with underlying currency by using reserve assets such as US Treasuries. Since the value of Treasuries are affected by interest rate, it is possible for stablecoins to become insolvent when interest rate increase. Some stablecoin issuers mitigate this risk by allocating the majority of their backing asset into short duration securities which are less affected by interest rate.<ref name=":0">{{Cite web |last=Narula |first=Neha |title=The Hidden Plumbing of Stablecoins: Financial and Technological Risks in the GENIUS Act Era |url=https://www.media.mit.edu/publications/the-hidden-plumbing-of-stablecoins-financial-and-technological-risks-in-the-genius-act-era/ |access-date=2026-03-18 |website=MIT Media Lab}}</ref>
=== Technology risk === In an analysis on IMF's Finance & Development, Professor Hélène Rey wrote that advancement in quantum computing is often ignored in the discussion of stablecoins. Quantum computers in the near future may be able to break public-key cryptography, allowing hackers to attack the currency networks used by stablecoins, potentially causing financial crises.<ref>{{Cite web |last=Rey |first=Hélène |date=September 2025 |title=Stablecoins, Tokens, and Global Dominance |url=https://www.imf.org/en/publications/fandd/issues/2025/09/stablecoins-tokens-global-dominance-helene-rey |access-date=2025-12-22 |website=IMF |at=Finance & Development |language=en}}</ref>
A research by the Massachusetts Institute of Technology pointed out that flaws in the logic of smart contracts could potentially result in stablecoin issuers losing control of the supply of stablecoins and their network. Cross-chain bridges are another attack vector which can cause deposit and redemption issues.<ref name=":0" />
=== Lack of reserve transparency === Tether's USDT is currently the world's largest market capitalization stablecoin. Tether initially claimed their stablecoin is fully backed by fiat currency. However, in October 2021, it failed to produce audits for reserves used to collateralize the quantity of minted USDT stablecoin.<ref>{{Cite news |last=Faux |first=Zeke |date=7 October 2021 |title=Anyone Seen Tether's Billions? |language=en |work=Bloomberg |url=https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether |url-status=live |access-date=9 August 2021 |archive-url=https://web.archive.org/web/20211007101222/https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether |archive-date=7 October 2021}}</ref> Tether were fined $41 million by the Commodity Futures Trading Commission (CFTC) for deceiving consumers.<ref>{{Cite web |date=2021-10-15 |title=CFTC Orders Tether and Bitfinex to Pay Fines Totaling $42.5 Million | CFTC |url=https://www.cftc.gov/PressRoom/PressReleases/8450-21 |website=Commodity Futures Trading Commission}}</ref> The CFTC found that Tether only had enough fiat reserves to guarantee their stablecoin for 27.6% of the time during 2016 to 2018. Since then, Tether began issuing assurance reports on USDT backing, although some speculation persists regarding the use of Chinese commercial paper for reserves.<ref>{{Cite news |last=Emily |first=Nicolle |date=27 July 2022 |title=Tether Says There Is No Chinese Commercial Paper Among Its Reserves |url=https://www.bloomberg.com/news/articles/2022-07-27/tether-says-there-is-no-chinese-commercial-paper-among-reserves |url-status=live |archive-url=https://web.archive.org/web/20230121031350/https://www.bloomberg.com/news/articles/2022-07-27/tether-says-there-is-no-chinese-commercial-paper-among-reserves |archive-date=21 January 2023 |access-date=9 August 2022 |work=Bloomberg |language=en}}</ref> As at February 2026, Tether had never completed an audit by an accounting firm.<ref>{{Cite web |last=Proud |first=Liam |date=2026-02-20 |title=Stablecoin giant is crypto's fragile foundation |url=https://www.reuters.com/commentary/breakingviews/stablecoin-giant-is-cryptos-fragile-foundation-2026-02-20/ |access-date=2026-02-20 |website=Reuters}}</ref>
=== Fragmentation of liquidity === Hyun-Song Shin, governor of the Bank of Korea, wrote in his research that since stablecoins on different blockchains are not interoperable, they create a fragmented ecosystem as compared to fiat money, which has the advantage of network effect. The requirement of "gas fee" for transactions, and the increase in fee when traffic is high, creates a dilemma in which users are incentivized to switch to blockchains with lower fees, ensuring that the ecosystem is fragmented.<ref>{{Cite journal |last=Shin |first=Hyun Song |date=2026-03-10 |title=Tokenomics and blockchain fragmentation |url=https://www.bis.org/publ/work1335.pdf |journal=BIS Working Papers |language=en |issue=1335 |via=BIS}}</ref>
=== "Death spiral" of algorithmic stablecoin === {{See also|Terra (blockchain)#Collapse}} Algorithmic stablecoins are vulnerable to a de-pegging process known as "death spiral",<ref>{{Cite web |date=2022-05-18 |title=The 'Death Spiral' of a Stablecoin - The Journal |url=https://www.wsj.com/podcasts/the-journal/the-death-spiral-of-a-stablecoin/6c09080e-ee6e-4dd9-9a1d-78eb20034679 |access-date=2025-07-31 |website=Wall Street Journal |language=en}}</ref><ref>{{Cite news |date=2022-05-12 |title=A Stablecoin 'Death Spiral' (Published 2022) |url=https://www.nytimes.com/2022/05/12/business/dealbook/terra-crypto-stablecoin.html |access-date=2025-07-31 |work=New York Times |language=en}}</ref> in which an external event, such as the tightening of global liquidity, led to heavy redemption of the stablecoin. This triggered the minting of the linked token to burn the stablecoin, causing the supply of the linked token to increase exponentially, further causing a decrease in price.<ref>{{Cite journal |last=Yip |first=Ronald |date=2022-11-24 |title=An Event Study on the May 2022 Stablecoin Market Crash |url=https://www.hkma.gov.hk/media/eng/publication-and-research/research/research-memorandums/2022/RM09-2022.pdf |journal=Hong Kong Monetary Authority - Research Memorandum |issue=9/2022 |via=HKMA}}</ref><ref name="Briola-2023">{{Cite journal |last1=Briola |first1=Antonio |last2=Vidal-Tomás |first2=David |last3=Wang |first3=Yuanrong |last4=Aste |first4=Tomaso |date=2023-01-01 |title=Anatomy of a Stablecoin's failure: The Terra-Luna case |url=https://www.sciencedirect.com/science/article/pii/S1544612322005359 |journal=Finance Research Letters |volume=51 |article-number=103358 |doi=10.1016/j.frl.2022.103358 |issn=1544-6123|arxiv=2207.13914 }}</ref>
A famous case of death spiral is the TerraUSD (UST), which was created by Terraform Labs founded by Do Kwon. TerraUSD was meant to maintain a 1:1 peg with the United States dollar.<ref name="cnbc">{{Cite web |title=Controversial stablecoin UST — which is meant to be pegged to the dollar — plummets below 50 cents |url=https://www.cnbc.com/2022/05/11/terra-ust-stablecoin-dives-below-1-peg-luna-cryptocurrency-down-80percent.html |url-status=live |archive-url=https://web.archive.org/web/20220511082328/https://www.cnbc.com/2022/05/11/terra-ust-stablecoin-dives-below-1-peg-luna-cryptocurrency-down-80percent.html |archive-date=11 May 2022 |access-date=11 May 2022 |website=CNBC|date=11 May 2022 }}</ref> Instead of being backed by dollars, UST was designed to keep its peg by linking it with another Terra network token, LUNA. The mechanism worked by providing an economic incentive for arbitrage. If UST lost its peg and traded below $1, an arbitrager could purchase it on the secondary market and redeem it for $1 worth of LUNA. Correspondingly, if UST traded higher than $1, market actors could mint new UST by locking in $1 of LUNA and then sell the new UST on the market for a profit. However, this mechanism assumes there is sufficient market demand for UST and LUNA, making the stablecoin inherently fragile.<ref>{{Cite journal |last=Clements |first=Ryan |date=2021 |title=Built to Fail: The Inherent Fragility of Algorithmic Stablecoins |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3952045 |journal=SSRN Electronic Journal |doi=10.2139/ssrn.3952045 |ssrn=3952045 |issn=1556-5068}}</ref>
In May 2022, UST broke its peg with its price plunging to 10 cents,<ref>{{Cite web |title=The crypto crash rivals both the internet bubble burst and the Great Financial Crisis, Bank of America says |url=https://fortune.com/2022/05/13/crypto-crash-rivals-internet-dotcom-bubble-burst-and-great-financial-crisis-bank-of-america/ |url-status=live |archive-url=https://web.archive.org/web/20220516010645/https://fortune.com/2022/05/13/crypto-crash-rivals-internet-dotcom-bubble-burst-and-great-financial-crisis-bank-of-america/ |archive-date=16 May 2022 |access-date=16 May 2022 |website=Fortune}}</ref> while LUNA fell to "virtually zero", down from an all-time high of $119.51.<ref>{{Cite news |date=13 May 2022 |title=Terraform Again Halts Blockchain Behind UST Stablecoin, Luna |work=Bloomberg News |url=https://www.bloomberg.com/news/articles/2022-05-13/terraform-again-halts-blockchain-behind-ust-stablecoin-luna |url-status=live |access-date=13 May 2022 |archive-url=https://web.archive.org/web/20220513051913/http://www.bloomberg.com/news/articles/2022-05-13/terraform-again-halts-blockchain-behind-ust-stablecoin-luna |archive-date=13 May 2022}}</ref> The collapse wiped out almost $45 billion of market capitalization over the course of a week.<ref>{{Cite news |date=14 May 2022 |title=Terra $45 Billion Face Plant Creates Crowd of Crypto Losers |work=Bloomberg News |url=https://www.bloomberg.com/news/articles/2022-05-14/terra-s-45-billion-face-plant-creates-a-crowd-of-crypto-losers |url-status=live |access-date=15 May 2022 |archive-url=https://web.archive.org/web/20220516142959/http://www.bloomberg.com/news/articles/2022-05-14/terra-s-45-billion-face-plant-creates-a-crowd-of-crypto-losers |archive-date=16 May 2022}}</ref><ref name="wired20220512">{{Cite magazine |last=Volpicelli |first=Gian M. |date=12 May 2022 |title=Terra's Crypto Meltdown Was Inevitable |url=https://www.wired.com/story/terra-luna-collapse/ |url-status=live |magazine=Wired |archive-url=https://web.archive.org/web/20230101185912/https://www.wired.com/story/terra-luna-collapse/ |archive-date=1 January 2023 |access-date=19 January 2023}}</ref>
In the case of TerraUSD, another contributing factor to its failure was its proof-of-stake mechanism. The fall in the price of LUNA caused validators to sell their stakes, allowing malign actors to become dominant validators.<ref>{{Cite web |last=Wong |first=Russell |date=July 2022 |title=Why Stablecoins Fail: A Look at Terra {{!}} Richmond Fed |url=https://www.richmondfed.org/publications/research/economic_brief/2022/eb_22-24 |access-date=2025-07-31 |website=Federal Reserve Bank of Richmond |language=en-us}}</ref>
== Comparison between Stablecoin and CBDC == {{see also|Asset tokenization}} A stablecoin should not be confused with a central bank digital currency (CBDC). CBDC is issued by central banks, meaning that they are a direct claim on the central bank, while stablecoin is issued by private entity.<ref name="Bank of England-2023" /><ref>{{Cite journal |last1=Arner |first1=Douglas W. |last2=Auer |first2=Raphael |last3=Frost |first3=Jon |date=2020 |title=Stablecoins: Risks, Potential and Regulation |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3979495 |journal=SSRN Electronic Journal |doi=10.2139/ssrn.3979495 |ssrn=3979495 |issn=1556-5068}}</ref>
Another difference is that CBDC, being issued by central banks, would belong to the monetary base (M0),<ref>{{Cite web |date=2021-07-19 |title=《中国数字人民币的研发进展白皮书》（中英文版全文附PDF下载） |url=https://www.waizi.org.cn/law/118112.html |access-date=2025-12-08 |website=集標數字資源網 |publisher=中国人民银行数字人民币研发工作组}}</ref> while stablecoins issued by commercial financial institutions would belong to the monetary aggregate (M2).<ref>{{Cite web |last1=李 |first1=莹亮 |last2=张 |first2=伟泽 |date=2025-06-13 |title=The How and Why Hong Kong Spearheads in Stablecoins Regulation丨CBN Correspondent |url=https://www.21jingji.com/article/20250613/herald/9a0af5670b4e32780e3982e83bdcac80.html |access-date=2025-08-16 |website=21经济网}}</ref>
The European Central Bank's digital euro project has been under consideration since 2021 but has not been legislated by the European Parliament as of August 2025. Christine Lagarde, president of European Central Bank, called it a "strategic priority" for Europe in response to US legislation of stablecoins.<ref>{{Cite web |date=2025-08-12 |title=Lagarde's 'euro moment' busted by dollar-linked stablecoins |url=https://www.politico.eu/article/lagardes-euro-moment-busted-by-stablecoins/ |access-date=2025-08-16 |website=POLITICO |language=en-GB}}</ref>
== Stablecoin and interest return == While most stablecoins are non-interest bearing and therefore do not provide interest returns to the holder, some issuers and service providers began offering yield-bearing stablecoins in an attempt to gain market share.<ref>{{Cite news |last=Shukla |first=Sidhartha |date=2025-05-20 |title=Yield-Bearing Stablecoins Challenge Dominance of Tether, Circle |url=https://www.bloomberg.com/news/articles/2025-05-20/yield-bearing-stablecoins-challenge-dominance-of-tether-circle |access-date=2025-08-01 |work=Bloomberg}}</ref><ref>{{Cite news |last=Kharif |first=Olga |date=2025-02-20 |title=Yield-Bearing Stablecoin Alternative Receives Approval From SEC |url=https://www.bloomberg.com/news/articles/2025-02-20/yield-bearing-stablecoin-alternative-receives-approval-from-sec |access-date=2025-08-02 |work=Bloomberg}}</ref><ref>{{Cite web |last=Macheel |first=Tanaya |date=2025-04-23 |title=PayPal introduces 3.7% yield on stablecoin balances to boost payments activity |url=https://www.cnbc.com/2025/04/23/paypal-introduces-3point7percent-yield-on-stablecoin-balances-to-boost-payments-activity.html |access-date=2025-07-30 |website=CNBC |language=en}}</ref><ref>{{Cite web |last=Higginson |first=Matt |date=2025-07-21 |title=Stablecoins payments infrastructure for modern finance |url=https://www.mckinsey.com/industries/financial-services/our-insights/the-stable-door-opens-how-tokenized-cash-enables-next-gen-payments |access-date=2025-07-30 |website=McKinsey}}</ref>
The reason most stablecoins with centralized issuers do not provide interest return is because that would potentially make them financial securities, thus falling under regulatory regime. The US's ''GENIUS Act'', Europe's ''MiCAR'', and Hong Kong's ''Stablecoin Bill'' all explicitly prohibit the provision of yield-bearing stablecoins by regulated issuers.<ref>{{Cite web |date=2025-07-24 |title=The GENIUS Act of 2025: Stablecoin Legislation Adopted in the US |url=https://www.lw.com/en/insights/the-genius-act-of-2025-stablecoin-legislation-adopted-in-the-us |access-date=2025-08-07 |website=Latham & Watkins |language=en}}</ref><ref>{{Cite journal |last=Aerts |first=Senne |last2=Lambert |first2=Claudia |last3=Reinhold |first3=Elisa |date=2025-11-24 |title=Stablecoins on the rise: still small in the euro area, but spillover risks loom |url=https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2025/html/ecb.fsrbox202511_05~63636227b4.en.html |journal=Financial Stability Review |language=en |via=ECB}}</ref><ref>{{Cite web |last1=Haylock |first1=Amita |last2=Lai |first2=Justin |date=2025-07-25 |title=Hong Kong's Stablecoin Bill: Key Amendments and Next Steps Following Legislative Passage {{!}} Insights {{!}} Mayer Brown |url=https://www.mayerbrown.com/en/insights/publications/2025/07/hong-kongs-stablecoin-bill-key-amendments-and-next-steps-following-legislative-passage |access-date=2025-08-07 |website=Mayer Brown |language=en}}</ref> Australian regulator treats yield-bearing stablecoins as managed investment schemes.<ref name="Australian Securities and Investments Commission-2025">{{Cite web |date=October 2025 |title=Digital assets: Financial products and services |url=https://www.asic.gov.au/regulatory-resources/digital-transformation/digital-assets-financial-products-and-services/ |access-date=2026-02-09 |website=Australian Securities and Investments Commission |language=en}}</ref> In February 2026, media reported that legislation in the US regarding the provision of interest was stalled due to opposition from banks.<ref>{{Cite web |last=Lang |first=Hannah |date=2026-02-04 |title=White House meeting fails to resolve US crypto legislation stalemate |url=https://www.reuters.com/legal/government/white-house-meeting-fails-resolve-us-crypto-legislation-stalemate-2026-02-03/ |access-date=2026-02-05 |website=Reuters}}</ref>
=== Yield provided by cryptoasset service providers === Some cryptoasset service providers (CASPs) such as trading platforms and market makers developed products for stablecoin users to earn interests. For example, a user can buy stablecoins through a trading platform and re-lent the bought stablecoins to the platform. The platform then provides the stablecoins to institutional borrowers to earn interest. The interest is passed to the user after subtracting the platform's margin. The European Union and Hong Kong completely prohibit CASPs from offering yield on payment stablecoins, while Singapore restricted such products to institutional investors under limited conditions.<ref>{{Cite journal |last=Ocampo |first=Denise Garcia |date=2025-10-23 |title=Stablecoin-related yields: some regulatory approaches |url=https://www.bis.org/fsi/fsibriefs27.htm |journal=FSI Briefs |language=en |publisher=Financial Stability Institute of the Bank for International Settlements |volume=27}}</ref>
=== Yield farming in decentralized platform === While issuers may not directly provide interest return, decentralized financial platforms are another possible avenue for earning interests. By providing stablecoins for liquidity on decentralized platforms, holders of stablecoins can get a share of the fees paid by liquidity takers. This process is known as "yield farming".<ref>{{Cite journal |last1=LI |first1=Thomas |last2=Naik |first2=Siddharth |last3=Papanicolaou |first3=Andrew |last4=Schönleber |first4=Lorenzo |date=2023 |title=Maneuvering and Investing in Yield Farms |url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4422213 |journal=SSRN Electronic Journal |doi=10.2139/ssrn.4422213 |ssrn=4422213 |issn=1556-5068}}</ref>
Contrary to popular belief, yield farming is not risk free, because the holders are engaged in lending activity. In the case of the TerraUSD, initially to drive adoption, the Anchor protocol was created to offer a yield of 19.5% to depositors of the stablecoin, a rate much higher than the return on US Treasuries. Thus, a large amount of the stablecoin is locked in the Anchor protocol. Subsequently when the price of TerraUSD began to crash. The holders are unable to cash out of their position and are left holding the bag.<ref>{{Cite web |last1=Schoar |first1=Antoinette |last2=Makarov |first2=Igor |last3=Liu |first3=Jiageng |date=2023-05-22 |title=Anatomy of a Run: The Terra Luna Crash |url=https://corpgov.law.harvard.edu/2023/05/22/anatomy-of-a-run-the-terra-luna-crash/ |access-date=2025-08-07 |website=The Harvard Law School Forum on Corporate Governance |language=English}}</ref><ref name="Briola-2023" />
== Legislation and regulation == === Armenia === The Central Bank of Armenia (CBA) has adopted the ''Law on Crypto Assets'' in 2025 to strengthen consumer protection in cryptocurrency transactions. In addition, the CBA is trying to introduce regulations on issuance of stablecoins in 2026 with assistance from the IMF.<ref>{{Cite web |last= |date=2025-12-24 |title=IMF Ready to Assist Central Bank of Armenia in Regulating Stablecoin Transactions |url=https://armbanks.am/en/2025/12/24/269549/ |access-date=2026-03-07 |website=Armenian Banks |language=en-US}}</ref><ref>{{Cite web |date=2025-12-05 |title=Republic of Armenia: 2025 Article IV Consultation, Sixth Review Under the Stand-By Arrangement |url=https://elibrary.imf.org/view/journals/002/2025/323/002.2025.issue-323-en.xml?cid=572337-com-dsp-crossref |access-date=2026-03-07 |website=IMF |doi=10.5089/9798229032605.002}}</ref>
=== Australia === Stablecoins in Australia are regulated by the Australian Securities and Investments Commission (ASIC). In December 2024, the ASIC published the "''Information Sheet 225 Crypto-assets''" (INFO 225), establishing the regulatory requirement of stablecoins under "''Corporations Act 2001''".<ref>{{Cite web |title=CP 381 Updates to INFO 225: Digital assets: Financial products and services |url=https://www.asic.gov.au/regulatory-resources/find-a-document/consultations/cp-381-updates-to-info-225-digital-assets-financial-products-and-services/ |access-date=2026-02-09 |website=Australian Securities and Investments Commission |language=en|date=2025-02-28}}</ref> Under the definition, issuers of stablecoin are treated as operating non-cash payment facilities; algorithmic stablecoins are treated as derivatives; while yield-bearing stablecoins are treated as managed investment schemes.<ref name="Australian Securities and Investments Commission-2025" /> In September and December 2025, the ASIC issued exemptions to obtain licenses for intermediaries providing services related to stablecoins and distributing stablecoins.<ref>{{Cite web |date=December 2025 |title=ASIC finalises new exemptions to support digital asset innovation |url=https://www.asic.gov.au/about-asic/news-centre/news-items/asic-finalises-new-exemptions-to-support-digital-asset-innovation/ |access-date=2026-02-09 |website=Australian Securities and Investments Commission |language=en}}</ref>
=== Bahrain === In July 2025, the Central Bank of Bahrain introduced the ''Stablecoin Issuance and Offering (SIO) Module''. Under the regulation, stablecoin issuers can issue single currency fiat-backed stablecoins pegged to the Bahraini Dinar, US dollar, or any other fiat currency upon obtaining approval of the central bank. Algorithmic stablecoins are prohibited.<ref>{{Cite web |last= |first= |last2= |first2= |title=Central Bank of Bahrain launches framework for Stablecoin regulation |url=https://www.zawya.com/en/business/digital-assets/central-bank-of-bahrain-launches-framework-for-stablecoin-regulation-jcl6t0ud |access-date=2025-08-11 |website=ZAWYA by LSEG |language=en}}</ref><ref>{{Cite web |title=Central Bank of Bahrain Issues Framework for Regulating Stablecoin Issuance |url=https://www.cbb.gov.bh/media-center/central-bank-of-bahrain-issues-framework-for-regulating-stablecoin-issuance/ |access-date=2025-08-11 |website=Central Bank of Bahrain |language=en-US}}</ref>
=== Canada === In November 2025, the Canadian government under Mark Carney announced in the Federal Budget 2025 of a proposed legislation to regulate the issuance of stablecoins. The legislation is expected to require issuers to maintain asset reserves, govern redemption policies, implement risk management frameworks, and protect personal information of Canadians. The ''Retail Payment Activities Act'' will also be amended to enable regulation of payment service providers using stablecoins.<ref>{{Cite web |date=2025-11-04 |title=Chapter 1: Building a stronger Canadian economy {{!}} Budget 2025 |url=https://budget.canada.ca/2025/report-rapport/chap1-en.html |access-date=2025-11-27 |website=Budget Canada}}</ref> The proposed legislation was made in direct response to the United States' legislation of the ''GENIUS Act''.<ref>{{Cite news |date=2025-11-05 |title=Budget plan for stablecoin rules to usher in Canada's 'digital dollar era,' advocates say |url=https://www.theglobeandmail.com/business/article-federal-budget-2025-stablecoin-legislation/ |access-date=2025-11-27 |work=The Globe and Mail |language=en-CA}}</ref>
=== China === Stablecoins are considered illegal in Mainland China.<ref>{{Cite web |last=Zhang |first=Yushuo |date=2025-07-18 |title=Shanghai Court Reveals Stablecoins Were Used in Illegal USD905 Million Forex Case, Report Says |url=https://www.yicaiglobal.com/news/shanghai-court-discloses-usd905-million-illegal-stablecoin-exchange-case |access-date=2025-10-27 |website=Yicai |language=en}}</ref> The People's Bank of China, the central bank of China, also asked Chinese companies, including Ant Group and JD.com, to stop their plans to issue stablecoins in the Hong Kong Special Administrative Region in October 2025.<ref>{{Cite web |date=2025-10-25 |title=Why China's pause on stablecoins will not dampen Hong Kong's digital asset hub push |url=https://www.scmp.com/tech/blockchain/article/3330221/chinas-pause-stablecoin-projects-will-not-dampen-hong-kongs-crypto-push-experts-say |access-date=2025-10-27 |website=South China Morning Post |language=en}}</ref> The central bank further clarified in November 2025 that stablecoins are considered non-compliant with current regulation and asked regulatory bodies and law enforcement to crackdown on the use of stablecoins.<ref>{{Cite web |date=2025-11-29 |title=打击虚拟货币交易炒作工作协调机制会议召开 |url=https://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5916794/index.html |access-date=2025-12-08 |website=中国人民银行}}</ref> In February 2026, the China Securities Regulatory Commission (CSRC) issued a notice banning the issuance of Renminbi-denominated stablecoins within and outside China, the reason being that currency issuance is a matter of sovereignty.<ref>{{Cite web |title=中国人民银行、中国证监会有关负责人就《关于进一步防范和处置虚拟货币等相关风险的通知》答记者问_中国证券监督管理委员会 |url=https://www.csrc.gov.cn/csrc/c100028/c7614320/content.shtml |access-date=2026-02-09 |website=CSRC}}</ref>
=== European Union === The European Union introduced the ''Markets in Crypto-Assets Regulation'' (MiCAR) in June 2023. The regulation became applicable to asset-referenced tokens and e-money tokens on 30 June 2024.<ref>{{Cite web |title=Markets in Crypto Assets Regulation (MiCAR) |url=https://www.centralbank.ie/regulation/markets-in-crypto-assets-regulation |access-date=2025-07-31 |website=Central Bank of Ireland}}</ref> MiCAR has no clear regulation on global firms issuing the same stablecoin both from an EU-regulated entity and from a third-country entity, causing concern that in that event of large scale redemption of a multi-country stablecoin, the reserves located in the EU might be quickly depleted.<ref>{{Cite web |last=Portes |first=Richard |date=2025-07-25 |title=The stablecoin loophole that could expose the EU |url=https://www.ft.com/content/3dd627ff-d091-4141-9c48-5d63a15eb879 |access-date=2025-07-31 |website=Financial Times}}</ref> In September 2025, a consortium of nine European banks announced the planned launch of a MiCAR compliant stablecoin in response to the dominance of US denominated stablecoins on the market.<ref>{{Cite web |last=Leask |first=Hugh |date=2025-09-25 |title=European banks seize on region's nascent stablecoin market with new launch |url=https://www.cnbc.com/2025/09/25/european-banks-seize-on-regions-nascent-stablecoin-market-with-new-launch.html |access-date=2025-10-08 |website=CNBC |language=en}}</ref>
=== Hong Kong === In December 2024, Hong Kong gazetted its ''Stablecoins Bill''.<ref>{{Cite web |last1=Haylock |first1=Amita |last2=Lai |first2=Justin |date=April 2025 |title=The Hong Kong Stablecoins Bill and Its Impact on the Crypto Landscape {{!}} Insights |url=https://www.mayerbrown.com/en/insights/publications/2025/04/the-hong-kong-stablecoins-bill-and-its-impact-on-the-crypto-landscape |access-date=2025-07-30 |website=Mayer Brown |language=en}}</ref> The bill was passed in May 2025.<ref name="ReutersHK">{{Cite news |last1=Li |first1=Jiaxing |last2=Zhen |first2=Summer |date=2025-07-29 |title=First Hong Kong stablecoin licences may be issued early next year, HKMA says |url=https://www.reuters.com/world/asia-pacific/first-hong-kong-stablecoin-licences-may-be-issued-early-next-year-hkma-says-2025-07-29/ |access-date=2025-07-30 |work=Reuters |language=en}}</ref> The Hong Kong Monetary Authority (HKMA), the regulatory body of stablecoins in Hong Kong, warned the public to "rein in the euphoria".<ref>{{Cite web |date=2025-07-30 |title=Stablecoins inspire hope, and hype, in Hong Kong |url=https://www.france24.com/en/live-news/20250730-stablecoins-inspire-hope-and-hype-in-hong-kong |access-date=2025-07-30 |website=France 24 |language=en}}</ref><ref name="ReutersHK" /> In particular, guidelines require stablecoin issuers to have strict rules on anti-money laundering, risk management, and corporate governance.<ref>{{Cite web |last1=Chuang |first1=Aileen |last2=Zhang |first2=Julie |date=2025-07-29 |title=Hong Kong set to issue first stablecoin licences 'early next year' |url=https://www.scmp.com/business/banking-finance/article/3320028/hong-kong-set-issue-first-stablecoin-licences-early-next-year |access-date=2025-07-30 |website=South China Morning Post |language=en}}</ref> In April 2026, the HKMA issued stablecoin licenses to HSBC and Standard Chartered.<ref>{{Cite web |date=2026-04-10 |title=HSBC, StanChart-led group among first to get stablecoin licences in Hong Kong |url=https://www.scmp.com/business/cryptocurrency/article/3349644/hong-kong-awards-stablecoin-licences-hsbc-stanchart-led-group-long-awaited-roll-out |access-date=2026-04-16 |website=South China Morning Post |language=en}}</ref>
=== Japan === In June 2022, Japan's Financial Services Agency launched the ''Regulatory Framework for Crypto-assets and Stablecoins''.<ref>{{Cite web |last=知可良 |first=安達 |date=2023-04-12 |title=ステーブルコインに関する法規制の概要とポイント解説 |url=https://www.ey.com/ja_jp/insights/financial-services/outline-and-points-of-laws-and-regulations-related-to-stablecoins |access-date=2025-08-18 |website=EY新日本有限責任監査法人 |language=ja-JP}}</ref> The regulation requires stablecoin issuer of fiat-backed stablecoin (known as digital-money type stablecoins in Japan) to register with the agency. The agency views algorithmic stablecoin as crypto assets and does not require issuer to register. However, intermediaries such as crypto exchanges are subject to regulations.<ref>{{Cite web |date=2022-09-14 |title=Regulatory Framework for Crypto-assets and Stablecoins |url=https://www.fsa.go.jp/inter/etc/20220914-2/02.pdf |access-date=2025-08-18 |website=Financial Services Agency, the Japanese Government}}</ref> In August 2025, fintech company JPYC received approval by the agency to launch the first stablecoin pegged to the Japanese Yen.<ref>{{Cite web |last= |first= |date=2025-08-17 |title=国内初の円建てステーブルコイン、金融庁承認へ JPYCが秋にも発行 |url=https://www.nikkei.com/article/DGXZQOUB146U80U5A810C2000000/ |access-date=2025-08-18 |website=日本経済新聞 Nikkei |language=ja}}</ref> The first yen-pegged stablecoin launched in October 2025.<ref>{{Cite web |last=Kihara |first=Leika |date=2025-10-27 |title=World's first yen-pegged stablecoin debuts in Japan |url=https://www.reuters.com/sustainability/boards-policy-regulation/worlds-first-yen-pegged-stablecoin-debuts-japan-2025-10-27/ |access-date=2025-10-27 |website=Reuters}}</ref>
=== Kyrgyzstan === In November 2025, Kyrgyzstan launched the first national stablecoin, USDKG. The issuer is state-owned company Virtual Asset Issuer OJSC. The stablecoin is backed by gold and pegged to the US dollar.<ref>{{Cite web |date=2025-11-06 |title=Kyrgyzstan launches first national stablecoin USDKG |url=https://en.kabar.kg/news/kyrgyzstan-launches-first-national-stablecoin-usdkg/ |access-date=2026-04-19 |website=Kyrgyz National News Agnecy |language=en}}</ref><ref>{{Cite web |last=Turgunbaeva |first=Aigerim |date=2025-11-12 |title=Kyrgyzstan launches $50 million of tokens in national stablecoin |url=https://www.reuters.com/world/asia-pacific/kyrgyzstan-launches-50-million-tokens-national-stablecoin-2025-11-12/ |access-date=2026-04-19 |website=Reuters}}</ref>
=== Russia === In September 2025, the Central Bank of Russia approved the stablecoin A7A5 as a digital financial asset which can be used by Russian importers and exporters for cross-border settlements.<ref>{{Cite news |date=2025-09-30 |title=Cтейблкоин А7А5 с привязкой к рублю признан в России в качестве ЦФА |url=https://ria.ru/20250930/steyblkoin--2045362531.html |access-date=2026-04-20 |work=РИА Новости}}</ref>
=== Singapore === In November 2023, the Monetary Authority of Singapore finalized its ''Stablecoin Regulatory Framework'' after conducting public consultation since October 2022.<ref>{{Cite web |last=Kharpal |first=Arjun |date=2023-08-15 |title=Singapore among world's first to agree to stablecoin crypto regulation |url=https://www.cnbc.com/2023/08/15/singapore-among-worlds-first-to-agree-stablecoin-crypto-regulation.html |access-date=2025-07-30 |website=CNBC |language=en}}</ref> Issuers of stablecoins are required to maintain a portfolio of reserve assets denominated in the currency of the stablecoin peg.<ref>{{Cite web |title=Singapore's central bank finalises regulatory approach to stablecoins |url=https://www.osborneclarke.com/insights/singapores-central-bank-finalises-regulatory-approach-stablecoins |access-date=2025-07-30 |website=Osborne Clarke |language=en}}</ref> On 16 November 2023, the regulator approved Paxos Digital and StraitsX as stablecoin issuers.<ref>{{Cite news |last=Ghosh |first=Suvashree |date=2023-11-16 |title=Singapore Vies With Asian Peers for Slice of $127 Billion Stablecoin Sector |url=https://www.bloomberg.com/news/articles/2023-11-16/singapore-vies-with-asian-peers-for-slice-of-127-billion-stablecoin-sector |access-date=2025-07-30 |work=Bloomberg |language=en}}</ref>
=== South Korea === Regulations on the issuance of stablecoins in South Korea are being discussed. In February 2026, Bank of Korea, the central bank of South Korea, suggested that only licensed commercial banks should be able to issue won-denominated stablecoins to alleviate concerns regarding money laundering and financial stability.<ref>{{Cite web |last=Kim |first=Nam-jun |date=2025-11-25 |title=Won-based stablecoin legislation unlikely this year as BOK, regulators clash over banks' role |url=https://koreajoongangdaily.joins.com/news/2025-11-25/business/finance/Wonbased-stablecoin-legislation-unlikely-this-year-as-BOK-regulators-clash-over-banks-role-/2461970 |access-date=2026-03-06 |website=Korea Joongang Daily |language=en}}</ref><ref>{{Cite web |last=Eom |first=Jaehyun |date=2026-02-23 |title=BOK Urges Limiting Stablecoin Issuers on Money Laundering Risks |url=https://www.bloomberg.com/news/articles/2026-02-23/bok-urges-limiting-stablecoin-issuers-on-money-laundering-risks |access-date=2026-03-06 |website=Bloomberg}}</ref> However, the Financial Services Commission (FSC) suggested a more open approach on the participation of technology firms, arguing that a rigid approach would hinder innovation.<ref>{{Cite web |last=Jin |first=Min-ji |date=2026-01-12 |title=Where does Korea stand on stablecoin adoption? |url=https://koreajoongangdaily.joins.com/news/2026-01-12/business/finance/Where-does-Korea-stand-in-stablecoin-adoption/2495213 |access-date=2026-03-06 |website=Korea Joongang Daily |language=en}}</ref>
=== UAE === In June 2024, the Central Bank of the UAE established the ''Payment Token Services Regulations'' to regulate the use of stablecoins in the UAE. The regulations prohibit persons within the UAE from accepting stablecoins for the sale of goods and services except licensed payment token.<ref>{{Cite web |last=Bhat |first=Divsha |date=2024-06-28 |title=UAE introduces regulations to clean up crypto market |url=https://www.agbi.com/finance/2024/06/uae-introduces-regulations-to-clean-up-crypto-market/ |access-date=2025-07-30 |website=AGBI |language=en-US}}</ref><ref>{{Cite web |title=Assessing the UAE Payment Token Services Regulation |url=https://www.financierworldwide.com/assessing-the-uae-payment-token-services-regulation |access-date=2025-07-30 |website=Financier Worldwide |language=en-US}}</ref>In April 2025, the sovereign wealth fund of Abu Dhabi, ADQ, and the First Abu Dhabi Bank, are set to launch a stablecoin backed by dirhams.<ref>{{Cite news |last=Maccioni |first=Federico |date=2025-04-28 |title=Abu Dhabi doubles down on crypto as wealth fund, FAB, IHC join forces for new stablecoin |url=https://www.reuters.com/world/middle-east/abu-dhabi-sovereign-wealth-fund-teams-up-with-fab-ihc-launch-new-stablecoin-2025-04-28/ |access-date=2025-08-07 |work=Reuters |language=en}}</ref>
=== United Kingdom === In October 2025, Andrew Bailey, governor of the Bank of England, announced that the Bank of England will publish a consultation paper on the UK's stablecoin regulation. The regulation is set to apply to stablecoins used for day-to-day payments and those used for settling tokenized financial transaction.<ref>{{Cite web |last=Bailey |first=Andrew |date=2025-10-01 |title=The new stablecoin regime |url=https://www.ft.com/content/eb013c4e-ed53-498b-9d75-2b5d9c7ecc65 |access-date=2025-10-08 |website=Financial Times}}</ref> Bailey is known to be a skeptic of stablecoin and once said stablecoins risked pulling money out of the banking system.<ref>{{Cite news |date=2025-10-01 |title=Widely-used stablecoins need to be regulated like money, BoE's Bailey says |url=https://www.reuters.com/sustainability/boards-policy-regulation/widely-used-stablecoins-need-be-regulated-like-money-boes-bailey-says-2025-10-01/ |access-date=2025-10-08 |work=Reuters |language=en}}</ref> The comments by Bailey drawn criticism from stablecoin issuer for constraining investment in the UK.<ref>{{Cite web |last=Rhodes |first=Tom |date=2025-10-03 |title=UK stablecoin issuer responds to BoE governor |url=https://www.ft.com/content/8a25b5d8-26e5-4693-acb7-03aa2085646f |access-date=2025-10-08 |website=Financial Times}}</ref> Under the proposed regulation, individuals would be subject to a limit of holding £20,000 worth of stablecoins.<ref>{{Cite web |date=2026-03-27 |title=Proposed regulatory regime for sterling-denominated systemic stablecoins |url=https://www.bankofengland.co.uk/paper/2025/cp/proposed-regulatory-regime-for-sterling-denominated-systemic-stablecoins |access-date=2026-03-30 |website=Bank of England |language=en}}</ref> In February 2026, the Financial Conduct Authority, Britain's financial regulator, announced the use of a "sandbox" programme to trial stablecoin products in controlled conditions.<ref>{{Cite web |last=Seers |first=Phoebe |last2=Howcroft |first2=Elizabeth |date=2026-02-26 |title=Revolut to test stablecoin in UK trial |url=https://www.reuters.com/sustainability/boards-policy-regulation/revolut-test-stablecoin-uk-trial-2026-02-25/ |access-date=2026-02-27 |website=Reuters}}</ref>
=== United States of America === In July 2025, the United States passed the ''GENIUS Act'', a bill which allows banks and other financial institutions to issue stablecoins backed by fiat currency or other high-quality collateral, such as US Treasuries. At the time of its passing, the bill was expected to generate greater demand for US Treasuries by stablecoin issuers.<ref>{{Cite news |title=Is the legislation of the GENIUS Act deeply flawed? {{!}} Aug 16th 2025 Edition |url=https://www.economist.com/letters/2025/08/14/is-the-legislation-of-the-genius-act-deeply-flawed |access-date=2025-08-18 |newspaper=The Economist |issn=0013-0613}}</ref><ref>{{Cite web |last=Watson |first=Kathryn |date=2025-07-18 |title=Trump signs landmark GENIUS Act, hailing "exciting new frontier" for crypto |url=https://www.cbsnews.com/news/trump-signs-genius-act-crypto-bill/ |access-date=2025-08-18 |website=CBS News |language=en-US}}</ref><ref>{{Cite web |date=2025-07-17 |title=US passes Genius Act, first major national crypto legislation |url=https://www.bbc.com/news/articles/cd78lvd94zyo |access-date=2025-07-18 |website=BBC News |language=en-GB}}</ref>
==== Stablecoins and US Treasuries ==== In November 2025, Stephen Miran at the Federal Reserve Board of Governors, confirmed that stablecoins are already increasing demand for US Treasuries, and are "contributing to the dollar's dominance". This would cause a decrease in the neutral rate of interest and lower borrowing cost for the US government.<ref>{{Cite web |last=Miran |first=Stephen |date=2025-11-07 |title=Speech by Governor Miran on stablecoins and monetary policy |url=https://www.federalreserve.gov/newsevents/speech/miran20251107a.htm |access-date=2025-12-22 |website=Board of Governors of the Federal Reserve System |language=en}}</ref> An estimate by the Bank for International Settlements using data from 2021 to 2025 found that demand for stablecoins lowers 3-month T-bill yields by about 2-2.5 basis points, an effect comparable to that of small-scale quantitative easing.<ref>{{Cite web |last=Aldasoro |first=Iñaki |last2=Ahmed |first2=Rashad |date=2025 |title=Stablecoins and safe asset prices |url=https://www.bis.org/publ/work1270.pdf |access-date=2025-12-22 |website=Bank for International Settlements |doi=10.2139/ssrn.5242448}}</ref>
==== State of Wyoming ==== In March 2023, the Legislature of the State of Wyoming passed the ''Wyoming Stable Token Act'', which established the Wyoming Stable Token Commission for the purpose of issuing stablecoin.<ref>{{Cite web |date=2023-03-17 |title=SF0127 - Wyoming Stable Token Act. |url=https://wyoleg.gov/Legislation/2023/SF0127 |access-date=2026-01-09 |website=Legislative Service Office}}</ref> In January 2026, the first state-backed stablecoin has been released in Wyoming.<ref>{{Cite web |last= |first= |date=2026-01-07 |title=The Frontier Stable Token is now publicly available for purchase |url=https://www.wyomingnews.com/news/local_news/wyomings-frontier-stable-token-now-available-for-public-purchase/article_e0f18203-2d92-487e-ab03-173939091be8.html |access-date=2026-01-09 |website=Wyoming Tribune Eagle |language=en}}</ref>
== Defunct stablecoin projects == === De-pegged stablecoins === * In June 2021, IRON stablecoin, which is an algorithmic stablecoin partially collateralized by USDC, de-pegged after large selling orders to its linked TITAN token.<ref>{{Cite journal |last1=Adams |first1=Austin |last2=Ibert |first2=Markus |date=2022-06-02 |title=Runs on Algorithmic Stablecoins: Evidence from Iron, Titan, and Steel |url=https://www.federalreserve.gov/econres/notes/feds-notes/runs-on-algorithmic-stablecoins-evidence-from-iron-titan-and-steel-20220602.htm |journal=FEDS Notes |issue=6/3/2022 |pages= None|doi=10.17016/2380-7172.3121 |issn=2380-7172 |via=Washington: Board of Governors of the Federal Reserve System|doi-access=free }}</ref> * In May 2022, Terra's stablecoin UST lost its peg with the US dollar. The subsequent failure of Terraform Labs resulted in the loss of nearly $40 billion invested in UST and LUNA tokens.<ref>{{Cite web |agency=Agence France-Presse |date=18 September 2022 |title=South Korean founder of failed cryptocurrency Terra denies he is 'on the run' |url=https://www.theguardian.com/technology/2022/sep/18/south-korean-founder-of-failed-cryptocurrency-terra-denies-he-is-on-the-run |access-date=19 September 2022 |website=the Guardian |language=en |archive-date=19 September 2022 |archive-url=https://web.archive.org/web/20220919082149/https://www.theguardian.com/technology/2022/sep/18/south-korean-founder-of-failed-cryptocurrency-terra-denies-he-is-on-the-run |url-status=live }}</ref><ref name="Nurbaev et al. 2023">{{Cite journal |last1=Nurbaev |first1=Vladimir |last2=Au |first2=Cheuk Hang |last3=Chou |first3=Chih-Yuan |title=When Stablecoin is No Longer Stable - A Case Study on the Failure of TerraUSD |url=https://aisel.aisnet.org/icis2023/blockchain/blockchain/7/ |journal=ICIS 2023 Proceedings |date=2023-12-11}}</ref> Terraform Labs filed for bankruptcy in January 2024. In December 2024, Do Kwon was extradited to the United States and subsequently charged with fraud. Do Kwon pleaded guilty in August 2025.<ref>{{Cite web |last1=Jamali |first1=Lily |last2=Labiak |first2=Mitchell |date=2025-08-13 |title=TerraUSD: 'Cryptocrash king' Do Kwon pleads guilty to fraud |url=https://www.bbc.com/news/articles/c2kznpdvwwlo |access-date=2025-08-17 |website=BBC |language=en-GB}}</ref><ref>{{Cite web |last=Gerken |first=Tom |date=2024-12-31 |title=Do Kwon: fugitive cryptocrash boss finally extradited to US |url=https://www.bbc.com/news/articles/cwy30n29qx5o |access-date=2025-08-05 |website=BBC |language=en-GB}}</ref>
=== Abandoned stablecoin projects === * In December 2018, Basis, an algorithmic stablecoin which previously raised $133 million from venture capital, has to shut down due to concerns about US regulation.<ref>{{Cite web |last=Loizos |first=Connie |date=2018-04-18 |title=Basis, a year-old startup that's building a price-stable cryptocurrency, just raised $133 million from top investors |url=https://techcrunch.com/2018/04/18/basis-a-year-old-startup-thats-building-a-price-stable-cryptocurrency-just-raised-133-million-from-top-investors/ |access-date=2025-07-31 |website=TechCrunch |language=en-US}}</ref><ref>{{Cite news |last=Irrera |first=Anna |date=13 Dec 2018 |title=Cryptocurrency project Basis to shut down and return funding to investors |url=https://uk.reuters.com/article/us-crypto-currency-basis/cryptocurrency-project-basis-to-shut-down-and-return-funding-to-investors-idUKKBN1OC2OV |archive-url=https://web.archive.org/web/20181230181205/https://uk.reuters.com/article/us-crypto-currency-basis/cryptocurrency-project-basis-to-shut-down-and-return-funding-to-investors-idUKKBN1OC2OV |archive-date=30 December 2018 |access-date=30 Dec 2018 |work=Reuters}}</ref><ref>{{Cite web |last=Lee |first=Timothy B. |date=2018-04-25 |title=Basis—the "stable" cryptocurrency with $133 million invested—explained |url=https://arstechnica.com/tech-policy/2018/04/why-investors-pumped-133-million-into-stablecoin-basis/ |access-date=2025-07-31 |website=Ars Technica |language=en}}</ref> * In February 2022, stablecoin project Diem was abandoned by Meta and later purchased by Silvergate Capital, which filed for bankruptcy in September 2024.<ref>{{Cite news |last=Knauth |first=Dietrich |date=2024-09-18 |title=Silvergate Capital enters bankruptcy after crypto bank's shutdown |url=https://www.reuters.com/legal/litigation/silvergate-capital-enters-bankruptcy-after-crypto-banks-shutdown-2024-09-18/ |access-date=2025-07-31 |work=Reuters |language=en}}</ref><ref>{{Cite news |date=2022-02-01 |title=Facebook-funded cryptocurrency Diem winds down |url=https://www.bbc.com/news/technology-60156682 |access-date=2025-07-31 |work=BBC |language=en-GB}}</ref> * In January 2024, the National Australia Bank (not to be confused with the Reserve Bank of Australia) announced that it would end its Australian Dollar fiat-backed stablecoin project. The project was originally created in January 2023 and aim to streamline cross-border transactions and trading carbon credits.<ref name="indiatoday20230119">{{Cite news |date=19 January 2023 |title=National Australia Bank joins stablecoin bandwagon, to launch fiat-backed digital currency by mid-2023 |url=https://www.indiatoday.in/cryptocurrency/story/national-bank-of-australia-to-launch-stablecoin-backed-by-australian-dollar-on-ethereum-network-2323605-2023-01-19 |url-status=live |archive-url=https://web.archive.org/web/20230120030721/https://www.indiatoday.in/cryptocurrency/story/national-bank-of-australia-to-launch-stablecoin-backed-by-australian-dollar-on-ethereum-network-2323605-2023-01-19 |archive-date=20 January 2023 |access-date=20 January 2023 |work=India Today}}</ref><ref>{{cite web |date=16 June 2024 |title=NAB kills its stablecoin, bankers decamp to form Ubiquity |url=https://www.afr.com/companies/financial-services/nab-kills-its-stablecoin-bankers-decamp-to-form-ubiquity-20240614-p5jlv3 |access-date=22 July 2025 |website=Australian Financial Review |language=en}}</ref>
==References== {{reflist}}
{{Cryptocurrencies|state=expanded}}
Category:Stablecoins Category:Cryptocurrencies