Stablecoin Legislation and the Private Stablecoin Banking Nexus

Stablecoin Legislation and the Private Stablecoin Banking Nexus

Stablecoins are digital assets designed to maintain a stable values relative to a reference currency like the US dollar. Many stablecoins maintain their value by holding reserves invested in high-quality, short-term, liquid, dollar-denominated assets. However, some stablecoins hold crypto assets or use algorithmic arbitrage trading to maintain parity with the dollar. Such coins are inherently risky and are excluded from the discussion that follo…