Articles by author
Stablecoins: what could hinder their rise?
Stablecoins are growing exponentially within financial markets. They are a type of cryptoasset whose value is pegged to fiat currency and is intended to remain stable allowing for usage as a payment instrument. The stability of their value is guaranteed through their reserve assets which must be invested in safe, non-volatile, liquid instruments. As a result, stablecoin holders are assured of the issuer’s ability to meet their at-par redemption requests. Under the current EU and US regulatory framework, stablecoin issuers are not allowed to grant interest to holders such that holders receive no return. This may become problematic, when compared with commercial bank deposits and money market funds.
12 APR 2026EMIR 3.0, post-trade risk reduction services and the initial margin threshold: an unintended consequence
Post trade risk reduction (PTRR) services are not new to over-the-counter (OTC) derivatives markets. Through EMIR 3.0, policymakers acknowledged their function (reducing counterparty credit risk and/or operational risk) and fostered their usage by laying down the exemption from the clearing obligation. Admittedly, however, they did not consider any impact of PTRR on margin requirements for non-centrally cleared OTC derivatives. Performing PTRR – specifically portfolio rebalancing – is set to increase the aggregate average notional amount (AANA). As the latter is calculated to determine whether the initial margin (IM) threshold is exceeded, counterparties may opt to avoid using PTRR to avoid becoming subject to the burdensome IM requirements. An outcome not in line with the intention to foster PTRR.
9 JUN 2025
