A major and often controversial stablecoin that aims to maintain its value at $1.00 USD, though its reserve backing has been a subject of debate and scrutiny.
Illicit financial activity
Illegal financial activities, such as money laundering or terrorist financing.
Systemic risk
The risk that the failure of one financial institution or market could trigger a cascade of failures across the entire financial system.
Algorithmic stablecoins
A type of stablecoin that uses algorithms and market incentives, rather than direct asset backing, to maintain its price peg.
Re-hypothecated
The practice of using assets pledged as collateral for one loan as collateral for a second, enabling greater liquidity and investment opportunities within financial markets.
Capital efficiency
The effectiveness with which capital is utilized to generate revenue or value, a key factor in maximizing economic productivity and growth.
Fractional reserves
A banking system in which only a fraction of bank deposits are held as reserves, with the rest loaned out, enabling banks to facilitate credit expansion and stimulate economic growth.
Yield
Returns or profits generated from an investment, often in the form of interest or dividends.
Cartel
A group of separate companies or institutions that combine to control prices or limit competition within an industry.
Insured depository institutions
Financial institutions (like banks) whose deposits are insured by a government agency, typically up to a certain amount, to protect depositors.
Entrenching the power of incumbent financial institutions
Deeply embedding or strengthening the power and influence of existing, large financial institutions.
Stablecoins
Digital assets designed to maintain a stable value relative to a fixed asset, like the U.S. dollar, minimizing price volatility compared to other cryptocurrencies.
