The National Institute of Standards and Technology (NIST) published an initial draft and is calling for comments for its paper: “Understanding stablecoin technology and related security considerations”.
Stablecoins are cryptocurrencies whose price is pegged to that of another asset (typically one with low price volatility). The market for stablecoins has grown tremendously – up to almost $200 billion in 2022. These coins are being used extensively in newly developing paradigms for digital money and commerce as well as for decentralized finance technology.
This work provides a technical description of stablecoin technology to enable reader understanding of the variety of ways in which stablecoins are architected and implemented. This includes a descriptive definition, commonly found properties, and distinguishing characteristics, as well as an exploration of stablecoin taxonomies, descriptions of the most common types, and examples from a list of top stablecoins by market capitalization.
This document also explores related security, safety, and trust issues with an analysis conducted from a computer science and information technology security perspective as opposed to the financial analysis and economics focus of much of the stablecoin literature.