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Stablecoin VariantsFiat-PeggedCommodity-PeggedCrypto-PeggedAlgorithmicPegged to a fiat currency orbasket of fiat currencies.Pegged to value of anexchange-traded commodityor basket.Pegged to the value of acryptocurrency or basket ofcryptocurrenciesSupply determined bycreating and destroying coinsbased on market demand.Independent custodian Independent custodian Smart contracts maintain peg Smart contracts maintain pegCollateral efficient ? Collateral inefficient No collateralNo volatility Potential volatility Volatile None / UnknownAn algorithmic stablecoin – issued and managed by a Central Bank – may one day prove to bethe most effective solution. However, this model is still in its infancy and needs carefuldevelopment.Today, only a fiat-backed stablecoin – issued and managed by a CentralBank – is a viable option.
Features of a Potential StablecoinRemittance Solution• Issuance & Governance• Issued by Central Bank• 1 to 1 peg against domestic currency• Transparent and strong custodianship• AML/KYC• Formal CDD process applied to individuals in source countries• Sign up governed by App design and smart contracts• Option for community ID in destination countries• Smart contracts governing remittance amounts and frequency to limitML risk• Regulator view of all transactions – real time
Page 1 and 2: Cutting-Edge Fintech for Cross-Bord
Page 3 and 4: The Remittance Problem in Pacific I
Page 5: Stablecoin VariantsFiat-PeggedCommo

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