Spotlight On Stablecoins And CBDCs: Part 1

This is the first installment in a series exploring stablecoins and central bank digital currencies (CBDCs). 

The uptick of cryptocurrency adoption since fall 2020, along with the expansion of decentralized finance (DeFi) protocols, have made stablecoins a major player in the digital assets space. Around the world, regulators grapple with how to manage stablecoins, while many central banks consider what's next for digital currency in and outside of their countries. 

The basics 

• A stablecoin is a cryptocurrency that is tied to the value of an underlying asset, often a fiat currency such as the U.S. dollar. Stablecoins can be tied to short-term securities (such as government debt) or backed by other cryptocurrencies (such as Etherum) or other assets (such as gold or oil).