Before “stablecoins” was even a word, fiat-backed digital assets were being issued on the Stellar network. But as time has passed, that word has been used in the broader blockchain ecosystem to define a lot of different token structures, and the truth is, not all of them are stable in the way we’d define them.
A stablecoin should have audited, fiat-backed reserves held in regulated banks and financial institutions. A stablecoin should be able to live up to its name. And what we've seen this week has proved why it's essential to distinguish and define what is genuinely a stablecoin from what is not. We believe that for consumers using stablecoins for payments, it needs to be fully reserved so they can transact with confidence.
We've seen significant progress moving the conversation of stablecoin legislation in the United States. We've seen bills from both sides of the aisle that understand the issues and can move this industry forward by providing clarity and guardrails. We also know that this is a global issue and think the same rules should apply with respect to stablecoins and are working to help create that consistency.
So let's seize this moment to push legislation that clearly defines and puts the guardrails we need to build trust, protect consumers, and harness the benefits of blockchain technology.