Stablecoin Glossary — Stablecoin Beat

Stablecoin Glossary 35 terms

Algorithmic Stablecoin

An algorithmic stablecoin maintains price stability through automated supply adjustments rather than reserve backing.

Arbitrage Mechanism

An arbitrage mechanism refers to market incentives that encourage traders to restore a stablecoin's price to its target peg.

An attestation is an independent verification of reserve balances at a specific point in time.

An audit is a comprehensive independent review of financial statements and reserve holdings.

Collateral Liquidation

Collateral liquidation is the forced sale of pledged assets when collateral values fall below required thresholds.

Collateral Ratio

The collateral ratio is the proportion of collateral required to support stablecoin issuance.

Crypto-Collateralized Stablecoin

A crypto-collateralized stablecoin is backed by cryptocurrency collateral locked in smart contracts.

A custodian bank is a financial institution responsible for holding reserve assets on behalf of a stablecoin issuer.

Depegging occurs when a stablecoin's price diverges from its target value.

Fiat-Backed Stablecoin

A fiat-backed stablecoin is a stablecoin supported by reserves denominated in a sovereign currency.

Liquidation Mechanism

A liquidation mechanism sells collateral automatically when its value falls below required thresholds.

Liquidity risk is the possibility that an issuer cannot meet redemption requests quickly.

Market Confidence

Market confidence refers to trust in the stability and redeemability of a stablecoin.

Overcollateralization

Overcollateralization occurs when collateral value exceeds the value of issued stablecoins.

Peg Maintenance

Peg maintenance refers to the economic and technical mechanisms used to keep a stablecoin's price aligned with its reference asset.

Price Stability

Price stability refers to the ability of a stablecoin to maintain a consistent value.

Redemption is the process through which stablecoins are exchanged for the underlying reference asset.

Reserve assets are financial instruments held to support the value of issued stablecoins.

Reserve Composition

Reserve composition refers to the types of assets used to back a stablecoin's circulating supply.

Reserve Management

Reserve management refers to the policies and practices used by stablecoin issuers to manage backing assets.

Reserve Transparency

Reserve transparency refers to public disclosure of assets backing a stablecoin.

Run risk refers to the possibility that many holders redeem stablecoins simultaneously.

Stability Mechanism

A stability mechanism is the set of economic or technical processes used to maintain a stablecoin's target value.

A stablecoin is a digital token designed to maintain a stable value relative to a reference asset such as a fiat currency.

Stablecoin Burning

Stablecoin burning is the permanent removal of tokens from circulation.

Stablecoin Collateral

Stablecoin collateral refers to assets pledged or locked to support the issuance of stablecoins.

Stablecoin Governance

Stablecoin governance refers to the rules and decision-making structures that control a stablecoin system.

Stablecoin Issuer

A stablecoin issuer is the entity responsible for creating and managing stablecoins.

Stablecoin Liquidity

Stablecoin liquidity refers to the ease with which stablecoins can be traded or redeemed without affecting market price.

Stablecoin Market Capitalization

Stablecoin market capitalization is the total value of all circulating stablecoins.

Stablecoin Minting

Stablecoin minting is the creation of new stablecoin tokens by an issuer or protocol.

A stablecoin peg is the mechanism used to maintain a stablecoin's value relative to a reference asset.

Stablecoin Regulation

Stablecoin regulation refers to legal and supervisory frameworks governing stablecoin issuance and use.

Stablecoin Supply

Stablecoin supply refers to the total number of stablecoin tokens currently circulating in the market.

Supply Adjustment

Supply adjustment refers to mechanisms that change token supply to maintain the peg.

Stablecoin Payments Glossary 42 terms

Address Whitelisting

Address whitelisting is the practice of allowing payments only to pre-approved blockchain addresses.

Blockchain Address

A blockchain address is a unique identifier used to send or receive digital assets on a blockchain network.

Checkout Integration

Checkout integration is the embedding of stablecoin payment options into an online or in-app purchase flow.

Compliance Controls

Compliance controls are operational and technical measures used to meet legal and regulatory requirements in payment systems.

Counterparty Risk

Counterparty risk is the risk that an intermediary or transaction partner fails to perform its obligations.

Cross-Border Payments

Cross-border payments are transfers of value between parties located in different countries.

Custodial Wallet

A custodial wallet is a wallet in which a third-party provider controls the private keys on behalf of the user.

A digital wallet is software that allows users to store, send, and receive stablecoins and other digital assets.

An escrow payment is a payment in which funds are held until specified conditions are satisfied.

Exchange Rate Lock

An exchange rate lock is a temporary guarantee of a quoted conversion rate during a payment transaction.

Fiat Conversion

Fiat conversion is the process of exchanging stablecoins or other digital assets into sovereign currency, or vice versa.

Foreign Exchange Conversion

Foreign exchange conversion is the process of exchanging one currency for another in international payment transactions.

Internal Ledger Transfer

An internal ledger transfer is a transfer of value recorded within the books of a platform rather than directly on a public blockchain.

Invoice Generation

Invoice generation is the creation of a payment record specifying what is owed, in what asset, and under what terms.

Liquidity Provider

A liquidity provider is an entity that supplies the assets needed to facilitate exchange, conversion, or payout in payment systems.

A mempool is the pool of pending blockchain transactions awaiting inclusion in a block.

Merchant Acceptance

Merchant acceptance refers to the ability of businesses to accept stablecoins as payment for goods and services.

Merchant Settlement

Merchant settlement is the process through which a merchant receives payment proceeds from a transaction.

Off-Chain Settlement

Off-chain settlement refers to payment processing or netting that occurs outside the blockchain ledger.

On-Chain Settlement

On-chain settlement refers to the final recording of a payment transaction directly on a blockchain ledger.

An on-off ramp is a service that converts between fiat currency and digital assets such as stablecoins.

A payment API is a software interface that enables applications to initiate, monitor, or manage payment transactions.

Payment Authorization

Payment authorization is the act of approving a transaction so that funds can be transferred.

Payment Finality

Payment finality is the point at which a payment becomes irreversible and fully settled.

Payment Gateway

A payment gateway is a technological interface that enables merchants to accept and route digital payments.

Payment Processor

A payment processor is a service provider that facilitates stablecoin transactions between customers and merchants.

Payment Request

A payment request is a structured instruction specifying the amount, asset, destination, and other details required for a payment.

Point-of-Sale Integration

Point-of-sale integration is the connection of stablecoin payment functionality to a physical or digital checkout system.

A private key is a cryptographic credential that allows a user to authorize transactions and control digital assets.

Programmable Payments

Programmable payments are payments that execute according to predefined software rules or contractual logic.

A public key is a cryptographic identifier used to derive addresses that can receive digital asset transfers.

QR Code Payment

A QR code payment is a payment method in which transaction details are encoded in a scannable image for wallet-based settlement.

Recurring Payments

Recurring payments are repeated transfers made on a scheduled basis for subscriptions, services, or contractual obligations.

Remittances are cross-border payments typically sent by individuals to family members or households in another country.

Self-custody is the practice of directly controlling the private keys associated with digital assets.

Settlement Risk

Settlement risk is the possibility that a payment or transfer will not be completed as expected after one party has already performed its side of the transaction.

Stablecoin Payments

Stablecoin payments are transactions in which stablecoins are used as the settlement asset for transferring value between parties.

Subscription Billing

Subscription billing is the recurring charging of users for ongoing access to a product or service.

Transaction Confirmation

Transaction confirmation is the process through which a blockchain network validates and records a payment transaction.

Transaction Monitoring

Transaction monitoring is the process of reviewing payment activity to detect suspicious, unusual, or policy-relevant behavior.

Treasury Payments

Treasury payments are transfers made by businesses or institutions for liquidity management, supplier settlement, or internal fund movement.

Webhook Notification

A webhook notification is an automated message sent from one system to another when a payment-related event occurs.

Tokenized Money Glossary 15 terms

Central Bank Digital Currency

A central bank digital currency (CBDC) is a digital form of sovereign currency issued directly by a central bank.

Central Bank Money

Central bank money is a form of money issued directly by a country's central bank.

Commercial Bank Money

Commercial bank money refers to deposits created and held within the banking system.

Digital Bearer Instrument

A digital bearer instrument is a tokenized asset whose ownership is determined by possession of cryptographic credentials.

Digital Currency

Digital currency refers broadly to monetary value represented and transferred in electronic form.

Digital Settlement Asset

A digital settlement asset is a tokenized form of value used to settle financial transactions on digital networks.

Monetary Liability

A monetary liability is a financial obligation issued by an entity representing a claim to monetary value.

Programmable Money

Programmable money refers to digital currency capable of executing automated conditions through software code.

Programmable Settlement

Programmable settlement refers to automated financial settlement processes executed through smart contracts.

A retail CBDC is a central bank digital currency designed for use by households and businesses in everyday payments.

Synthetic CBDC refers to privately issued digital money backed by reserves held at a central bank.

Tokenized Deposit

A tokenized deposit is a digital representation of a commercial bank deposit issued on a distributed ledger.

Tokenized Financial Asset

A tokenized financial asset is a traditional financial instrument represented as a digital token on a distributed ledger.

Tokenized Money

Tokenized money refers to digital representations of monetary value issued and transferred on distributed ledger systems.

A wholesale CBDC is a digital form of central bank money intended for use by financial institutions.

Stablecoin Infrastructure Glossary 15 terms

A blockchain is a distributed digital ledger that records transactions across a network of computers in a secure and tamper-resistant manner.

Blockchain Bridge

A blockchain bridge is a protocol that enables digital assets to move between separate blockchain networks.

Consensus Mechanism

A consensus mechanism is the process through which blockchain networks agree on the validity of transactions.

Decentralized Finance

Decentralized finance (DeFi) refers to financial services built on blockchain networks without traditional intermediaries.

Distributed Ledger Technology

Distributed ledger technology (DLT) is a system in which transaction records are shared and synchronized across multiple network participants.

Gas fees are charges paid to execute transactions or smart contracts on certain blockchain networks.

Interoperability

Interoperability refers to the ability of different blockchain networks to exchange data or assets.

Layer 1 Blockchain

A Layer 1 blockchain is the base network responsible for validating and recording transactions.

Layer 2 Scaling

Layer 2 scaling refers to technologies built on top of base blockchains to increase transaction throughput.

A node is a computer that participates in a blockchain network by maintaining a copy of the ledger.

An oracle is a service that provides external data to blockchain networks.

Proof of stake is a blockchain consensus mechanism in which validators secure the network by staking digital assets.

Proof of work is a consensus mechanism where participants solve computational puzzles to validate transactions.

A smart contract is a self-executing program that automatically performs actions when predefined conditions are met.

A validator is a participant responsible for verifying transactions and securing a blockchain network.