Stablecoins are a relatively new means of exchange within the payments system. They have many of the characteristics of money, serving as a store of value and a medium of exchange, although they do not serve as a unit of account. Stablecoin issuers tie their currency, unit-for-unit, to the national currency, and to assure confidence in its value, the issuers hold acceptable assets as reserves denominated in the national currency. Such reserves are invested in relatively safe assets that provide a return sufficient to pay interest to the holders of stablecoins while also earning the issuer a profit. …

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