How Does the Regulatory Environment Affect a DeFi Treasury's Decision to Hold Fiat-Backed Stablecoins? ▴ Learn

How Does the Regulatory Environment Affect a DeFi Treasury’s Decision to Hold Fiat-Backed Stablecoins?

Fiat-backed stablecoins face increasing regulatory scrutiny regarding their reserves, auditing, and compliance. A treasury holding these assets is exposed to the risk of the issuer being frozen, sanctioned, or shut down by regulators.

This risk must be weighed against the stability offered. The treasury must monitor regulatory changes and potentially diversify into decentralized stablecoins to mitigate this counterparty risk.

What Mechanisms Do DAOs Use to Diversify Their Treasury Assets?

What Is a “Stablecoin” and How Is It Typically Regulated?

How Do Algorithmic Stablecoins Differ from Asset-Backed Stablecoins?

What Is the Difference between an Algorithmic Stablecoin and a Fiat-Backed Stablecoin for Treasury Holdings?