Glossary · Stablecoins
Fiat-backed stablecoin
Also: fiat-collateralized stablecoin, reserve-backed stablecoin
A fiat-backed stablecoin is a token whose issuer holds cash and short-dated government debt in reserve against every unit in circulation, redeeming units at par for qualified customers.
Related terms
- Stablecoin
- A stablecoin is a token designed to hold a constant value against a reference asset, almost always the US dollar, using reserves, overcollateralization or a hedged trading position to defend the peg.
- Attestation
- An attestation is an accountant's report confirming that a stablecoin issuer held stated reserves at a stated moment, a narrower assurance than a full audit because it verifies a snapshot rather than the issuer's controls over time.
- Redemption
- Redemption is the right to exchange a stablecoin with its issuer for the underlying asset at par, and the practical accessibility of that right is what separates a peg that holds under stress from one that does not.
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