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Occasional paper on Stablecoins

Banco de Portugal working group on crypto-assets
Publication Year 
JEL Code 
E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System
E51 - Money Supply; Credit; Money Multipliers
E58 - Central Banks and Their Policies
F31 - Foreign Exchange
G21 - Banks; Other Depository Institutions; Mortgages
G23 - Pension Funds; Other Private Financial Institutions
G28 - Government Policy and Regulation
L50 - General
O32 - Management of Technological Innovation and R&D
O33 - Technological Change: Choices and Consequences; Diffusion Processes
Although the terminology used to define stablecoins is currently ambiguous, they can be broadly defined as a specific type of crypto-asset that aims to maintain a stable value relative to a specified currency, asset, or pool of currencies/assets. This paper characterises different types of stablecoins according to the stabilisation mechanism used and analyses the current stablecoins’ market. It also describes the regulatory framework applicable to stablecoins in a few selected jurisdictions. The main focus of the paper is the identification of the main risks associated with stablecoins, particularly the so-called global stablecoins, i.e., those stablecoins with a potential to be adopted across different jurisdictions and achieve a substantial volume. Finally, the paper concludes that continuous monitoring of the stablecoins’ market should be pursued, given their increasing relevance and potential impact on the financial sector.
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