Stablecoin Glossary

ACH (Automated Clearing House)

ACH (Automated Clearing House) is a United States-based electronic payment network designed for batch payment of bank transfers, for example, payroll, vendor payments, and subscription billings. ACH transactions are not immediate and take 1-3 business days to clear/settle. Although lower cost than wire transfer and reliable in comparison, ACH does not offer instant clearing/settlement, which has become an obstacle for today’s global economy that has a growing need for fast, programmable, and always-on payment infrastructure for efficient operation and liquidity management.

Accounts Payable (AP)

Accounts Payable (AP) represents the total amount a company owes to suppliers/vendors for products/services they have received but have not been paid for. The complexity of AP increases with international operations because currency fluctuations, banking delays, and account reconciliation issues create significant barriers to companies’ ability to manage their liquidity globally. Companies that effectively manage their accounts payable experience improved cash flow visibility, stronger relations with their suppliers/vendors, and can better utilise their working capital globally by minimising both the operational friction and payment delay associated with making cross-border payments.

Accounts Receivable (AR)

Accounts Receivable (AR) represents amounts that are due to a business from its customers for the delivery of products/services. AR is a critical factor affecting a company’s cash flow and its liquidity. The time it takes to collect an AR can affect both the amount of available cash to support operations and working capital. Settlement delay, Currency Conversion Risk, and Fragmented Payment Rail(s) are common issues that may be encountered when collecting AR in international markets. Therefore, good AR management will help companies develop greater predictability and reduce exposure to Credit Risk.

Algorithmic Stablecoin

Algorithmic Stablecoins maintain their pricing stability via an automated response to changing supply & demand as opposed to the use of Fiat Reserves. The amount of tokens in circulation is adjusted automatically (via smart contracts) when changes occur to market conditions, thereby maintaining the value of the coin. By way of design, these coins are intended to be efficient, decentralised, and capital-efficient. However, it has proven to be structurally difficult to achieve long-term pricing stability at scale without using some form of collateral backing, which has made it particularly susceptible to market pressure and/or users losing faith in the system.

AML (Anti-Money Laundering)

Anti-Money Laundering (AML) Laws, Regulations & Procedures are implemented to help protect financial institutions from the misuse of the financial system for money laundering activities. Anti-money laundering practices include customer identification, transaction monitoring, risk assessments, and reporting potential suspicious transactions. Both the cryptocurrency ecosystem and the traditional finance industry rely heavily upon AML frameworks and compliance to meet global standards of anti-money laundering regulation, to reduce fraud risk, and to promote and protect the integrity of financial systems. Successful AML programs assist in establishing and promoting public trust within the marketplace and stop the misuse of the payment infrastructure.

Batch Payment

Batch payments allow multiple transactions to be processed at one time using one scheduled cycle; this type of processing is typically used for payroll, supplier payments, and reimbursement. Processing through batch allows both enterprise and banking entities to lower their operating expenses as well as make the overall processing easier. On the other hand, because payments are processed through batches, they do not execute on an individual basis nor in real-time, which results in delayed processing. In recent years, with advancements in technology, batch processing has been increasingly replaced by instant payment rails and programmable settlement systems.

Beneficial Owner

A beneficial owner is an individual who ultimately owns, controls, or receives benefits from a corporation, regardless of whether or not that person’s name appears in registered documentation for the corporation. The identification of beneficial owners is required during many aspects of the KYB/AML compliance process. Identification of beneficial owners provides transparency into how corporations have structured themselves and increases regulatory oversight. Accurate information regarding beneficial ownership is important to limiting the potential exposure of enterprise risk related to financial crimes and increasing confidence in all international financial and business transactions.

BIC / SWIFT code

A BIC (Bank Identifier Code) or SWIFT code provides a means for routing an international bank transfer through the SWIFT messaging system. The purpose of a BIC/SWIFT is to uniquely identify a bank and branch internationally, so that payments can be correctly routed and securely processed within a global banking environment. There are no other methods by which an international transaction can be directly routed. As it will remain one of the fundamental components of existing banking infrastructures, facilitating global financial communications and clearing/settlement activities among correspondent banks located within dispersed jurisdictions.

Blockchain Analytics

Blockchain analysis is the study of on-chain data in order to monitor activity and trace transactions, detect fraudulent activity, and measure exposure to risk. Blockchain analysis is most commonly employed in areas related to compliance, investigation or sanctions screening. Traditional banking systems lack a real-time flow of assets across networks, as seen with blockchain technology, allowing users to analyse the movement of digital assets, in addition to enhancing regulatory bodies’ ability to track and monitor movements of digital assets, while also improving AML enforcement and increasing overall understanding of digital asset movement trends.

Blockchain Finality

Blockchain finality is the point at which a transaction is considered irreversible and permanently enters the record on the blockchain. The amount of time it takes for finality to occur can vary from seconds to minutes, depending on the network. Finality provides stronger settlement certainty than traditional financial systems, where transactions may be reversed or take days to confirm. Finality is also very important to payments and settlement systems as it provides trust and consistency within digital asset infrastructure by reducing counterparty risk.

Burning (Token Burning)

Burning is the process of removing tokens from circulation forever by sending them to an address that cannot be used again in any way on a blockchain. In stablecoin systems, users burn their coins when they exchange coins for fiat. This mechanism helps to keep the supply balanced and helps to maintain peg stability by ensuring that the circulating supply of coins matches the total reserves. It is usually used to manage inflation and to maintain economic equilibrium throughout the digital asset network.

CASP (Crypto-Asset Service Provider)

A CASP is a licensing and regulatory classification introduced under the European Union’s MiCA (Markets in Crypto-Assets) regulation. It applies specifically to crypto businesses operating in Europe that provide services such as custody, exchange, transfers, trading, or advisory services for digital assets.

To legally operate across the EU, these firms must obtain a CASP license/authorization from relevant European regulators and comply with strict requirements around capital reserves, security, compliance, anti-money laundering, and consumer protection. The goal of the CASP framework is to create a standardized and regulated crypto ecosystem across Europe.

Cash Flow Forecasting

Cash Flow Forecasting is the method used to estimate future inflows and outflows of cash so that a business may effectively manage its liquidity and conduct financial planning. Cash Flow Forecasting enables companies to forecast their future funding needs, determine how they will invest funds generated or received from various sources, and ensure that they never experience a shortage of cash at any point. By utilising faster payment systems based on Stablecoins, businesses can increase predictability regarding when transactions will be settled and gain near real-time insight into all cash movements across Accounts and Jurisdictions.

CFT (Countering the Financing of Terrorism)

The primary goal of CFT is to prevent the criminal use of the world’s financial systems from being used to fund terrorist activities. CFT involves several types of surveillance, verification, and reporting by financial institutions and others who have dealings with them on behalf of their customers. To be able to operate globally and to build trust in modern payment systems – especially those based upon cryptocurrency — it is now crucial that all participants in these systems comply with CFT regulations.

Corporate Card

A Corporate Card is a method of payment provided to employees for company-related expenditures like travel, purchases of supplies and equipment, subscription services, etc. A Corporate Card provides numerous benefits to both employees and management. Employees benefit from easier expense tracking and improved financial control. Management also enjoys streamlined reporting processes. Many new corporate cards offer employees the ability to track their real-time spend amounts while travelling outside of their residence. This helps organisations with better visibility into employee spending and a reduction of burden across the finance team.

Correspondent Banking

To be able to send international transactions, banks use a third bank’s services through the help of correspondent banking. Lack of efficiency, additional costs, and long payment times are additional issues that correspondent banking creates. To move money globally, banking systems that are built on stablecoins help to eliminate the use of correspondent banking by sending money directly around the world quickly and cheaply.

Cross-border Payment

To conduct a cross-border payment, money must be sent to someone who is in a different country. These payments are sent via third parties, have slow payment times because they must be converted to a different currency, and take several days to settle. Modern financial technologies such as blockchain and stablecoins help to eliminate cross-border payment inefficiencies for global commerce, remittances, and business payments, and reduce payment processing times.

Crypto-backed Stablecoin

Crypto-backed stablecoins have as their collateral base different cryptocurrency assets (as opposed to traditional currencies). These stablecoins would be subject to over-collateralization in order to mitigate the risks associated with volatility. Additionally, smart contracts and liquidity mechanisms can act to maintain the price stability of such assets. Although they provide many benefits, including decentralisation and transparency. The ability for these types of stablecoins to maintain their level of stability will depend significantly upon the effectiveness of decentralised finance ecosystem-based collateral management, decentralised decision-making systems, and automatic risk control.

Currency Risk

The fluctuation of exchange rates among various currencies creates currency risk. This creates a significant threat to companies that are involved with international transactions, as it can negatively affect revenue, cost, and profit margin. Managing the currency risk associated with international transactions is key for many organisations to reduce financial uncertainty. Organisations may use hedging instruments, adjust their pricing for each country, and create “natural” hedges by matching income and expense streams in multiple countries. Therefore, effective currency risk management is crucial for financial stability and providing consistent cash flow.

DASP (Digital Asset Service Provider)

DASP is a regulatory designation that applies to firms providing services in relation to digital asset services, such as trade, exchange or transfer services. The DASP model establishes regulatory compliance obligations that align with the respective jurisdictions’ legislative frameworks. The DASP model has been developed by regulatory bodies to help establish a standardised framework through which they can regulate this emerging industry, provide crypto consumers with greater protection, and ensure that digital asset service providers comply with relevant laws and regulatory requirements.

Enhanced Due Diligence (EDD)

Advanced forms of verification are often referred to as Enhanced Due Diligence (EDD). These forms of verification are typically used on high-risk customers/individuals/entities and include additional layers of identity verification, source of wealth/funds verification, behavioural monitoring, etc. The primary reason that EDD is incorporated into most Anti-Money Laundering (AML) regimes is to help mitigate higher levels of financial crime risk. Politically Exposed Persons (PEPs), high-value transactional activity, and complex corporate structures are examples where this would be utilised to increase compliance and reduce fraud/risk associated with illegal financial activities.

EURC

EURC allows for international euro-denominated transactions to occur across all blockchains with the goal of enabling companies and individuals to send money internationally in euros, utilising a blockchain-based solution instead of traditional banking channels. The ability to reduce or eliminate the exchange rate conversion risk (FX) that typically accompanies an international transaction will provide greater speed and lower costs when making cross-border payments. By eliminating the need for banks to act as intermediaries, it will also improve upon current timelines associated with clearing international wire transfers.

FATF (Financial Action Task Force)

Beginning with the fact that FATF is an intergovernmental entity that establishes and enforces anti-money laundering (AML) and counter-terrorism financing (CFT) at a global standard level, its recommendations drive the regulation of AML/CFT across all member nations. The recommendations by FATF have a direct effect on how crypto-assets and financial institutions comply with their obligations to develop, implement, and maintain AML/CFT compliance frameworks.

Fiat-backed Stablecoin

A fiat-backed stablecoin is a type of digital money that has a 1:1 value to fiat currency. Backed by an equal amount of cash or other very safe, low-yielding investments (called “reserves”), this model is the most popular because it’s both stable and transparent. The fiat-backed stablecoin is the base of today’s modern digital payment systems, providing for fast settlement, reliable treasuries, and lower volatility for international payments.

FinCEN

Financial Crimes Enforcement Network (“FinCen”) is a U.S. regulatory agency responsible for overseeing compliance with antiterrorist activities and financial crime laws in the United States. It provides mandates to report suspicious activity of financial institutions as well as compliance programs to ensure that these institutions are complying with financial regulation laws. Additionally, it will provide guidance on how cryptocurrency-related businesses may comply with the regulations of the United States as well.

Forward Contract

Forward contracts allow companies to protect their revenue streams from currency price changes by agreeing to buy or sell foreign currency with another company at an agreed-upon price (i.e., “fixed” rate) for delivery on a specific date. Forward contracts give businesses cost certainty as they can be hedged against the risk of unfavourable currency movements. Companies use forward contracts extensively throughout their organisations — particularly within their Treasury departments, Trade Finance groups, and when engaging in Cross-Border Commercial Transactions.

Forward Rate

The forward rate can be defined as the exchange rate (for a particular currency pair) that is stipulated in the forward contract for future delivery. It expresses the expected value of the currency in the future. To limit the risk of foreign exchange (FX) as a result of international business activities, enterprises utilise forward rates to control the costs of goods and services received and the expenses incurred. When pricing is set firm, the organisation can eliminate the uncertainty of future costs and expenses and improve financial planning in an environment in which multiple currencies are used.

FX Hedging

Currency risk protection through FX hedging involves reducing a company’s exposure to exchange rate volatility during international transactions by employing either an operational method (i.e., hedging) or a financial instrument (e.g., forward contracts, options, swaps). The primary goals of hedging are to stabilise revenue, maintain profit margins, and increase forecast reliability as part of a company’s global financial planning. Therefore, it can be considered a core element when the company operates globally and experiences high levels of volatility with regard to exchange rates.

FX Rate

The FX rate shows the value of one currency against another. In international trade, payments, and investments, it determines the conversion costs. Based on the market’s supply, demand, and macroeconomic factors, FX rates will change. FX rates also directly influence profitability, pricing, and a business’s financial activities. For companies that conduct international trade and maintain a global multi-currency treasury, the understanding of FX rates is vital.

IBAN

IBAN (International Bank Account Number) is an international method for identifying all bank accounts worldwide, especially throughout Europe and elsewhere. The purpose of IBAN is to help ensure that your money gets to the correct destination when making international payments. Therefore, it can help reduce the number of errors in international payments due to incorrect information about banks or customers. In addition, by providing a standardised way to provide account numbers, IBAN helps make international banking easier and faster.

Instant Payment

The benefits of using an instant payment system include: they offer immediate processing and settling (of money) between bank accounts, it is possible for them to settle transactions in a matter of seconds, rather than days as with some legacy systems, they support increased liquidity and therefore a better user experience, and finally, they also eliminate or at least lessen the risks associated with settlement.

ISO 20022

ISO 20022 is an international financial messaging standard that enhances the quality, detail, and compatibility of financial payment messages. The new standard will allow for better details about each transaction to be communicated by all types of financial systems. This is expected to provide a solid base as banks replace their existing legacy systems with state-of-the-art payment systems, improve clarity and compliance in both cross-border and domestic payments through improved message format, transparency, and speed.

KYB (Know Your Business)

KYB (Know Your Business) is a method that verifies an organisation before adding it as a customer in a financial system. The verification includes: confirming that a business entity has been registered with the appropriate authority, determining who owns and controls the business entity, and confirming their level of compliance. KYB is important because it helps prevent fraud, assists organisations in meeting their regulatory obligations, and aids in managing the risks associated with financial crimes. As such, many businesses use KYB when working within corporate banking environments or through various Fintech platforms to build transparency and trust.

KYC (Know Your Customer)

KYC, or Know Your Customer, is a compulsory verification process aimed at confirming customer identities, predominantly conducted by financial services. Being a critical aspect of an AML Compliance Program, the KYC process also assists in the prevention of fraudulent and illicit financial activities. The KYC process includes verification of documents, biometrics, and risk psychometric profiling. The KYC process is critical for the financial provision and services in a controlled space and offers regulation to the customer’s financial services around the globe.

Liquidity Management

Liquidity management means that a company will have enough money (cash) or other quick-to-sell assets (liquid assets) so it can pay its bills as they become due. Liquidity management is important because it helps keep an organisation financially stable and keeps it running smoothly. The use of faster systems to settle transactions improves the efficiency of managing liquidity by removing funds from “lockup” status and provides an entity with real-time information about how much money it has at hand. Properly managed liquidity allows companies to make good investment choices and maximise their working capital across all their international locations.

Local Rails

Local rails are digital payment infrastructures (e.g., ACH in North America, UPI in India, SEPA in Europe) that enable rapid, low-cost electronic payments across borders within specific countries. These infrastructures work well for domestic electronic transactions, but are typically not inherently designed to operate effectively as part of an integrated cross-border rail. With increasing amounts of business being conducted globally, companies use several different infrastructure layers (e.g., stablecoins, specialised cross-border payment network operators) to enable cross-border transactions internationally.

MiCA (Markets in Crypto-Assets Regulation)

MiCA is an EU regulatory framework that gives a clear and detailed framework for the regulation of crypto assets. The MiCA framework establishes regulations for the licensing and operation of all market actors in the crypto-asset sector (issuers, service providers, stablecoin operators, and CASPs), thereby providing legal clarity for the use of crypto-assets and enhancing consumer protection.

Minting

Minting refers to the creation of new tokens within a blockchain. When it comes to fiat-backed stablecoins, minting happens once users have deposited their fiat money and will be rewarded with an equal number of tokens in digital form. Minting plays a central role in regulating the total number of tokens available for each type of coin, as well as maintaining an accurate representation of all issued stable coins compared to the actual fiat money reserves backing them.

Multi-currency Account

A multi-currency account is a type of account that provides users with the capability to maintain one multi-currency account to hold, convert, transfer, and withdraw money in many different currencies. Multi-currency accounts are also referred to as foreign currency-denominated bank accounts. The use of a multi-currency account for managing business accounts and/or personal accounts can help reduce foreign exchange conversion charges associated with exchanging funds from one country to another.

Natural Hedge

A natural hedge represents an alternative to the use of financial derivatives as a method for reducing currency exposure. Rather than employing financial tools to reduce foreign exchange (FX) risk, a business may instead choose to create a natural hedge. A natural hedge allows a firm to minimise the impact of foreign-exchange volatility on its net income by matching, or “hedging,” its foreign-exchange-denominated revenues with its foreign-exchange-denominated expenses.

Nostro Account

A Nostro account is an account for a local bank (domestic) that is denominated in a foreign currency. The primary function of this type of account is to facilitate settlement for foreign currency transactions. Correspondent banking uses Nostro accounts as one of its major tools to help domestic banks with cross-border liquidity management and foreign exchange transaction execution.

Off-ramp

An off-ramp is a way to convert your cryptocurrency back into money you can use in the “real world” (i.e., cash) so you can withdraw it from a bank account. Off-ramps are important because they allow digital currencies to be used in ways that would be difficult or impossible if there were no mechanism to get them out of the blockchain ecosystem and into the normal monetary system.

On-ramp

An on-ramp is a service that changes Fiat money into cryptocurrency, allowing people to access blockchain-based financial systems. The on-ramp provides the means for people to get involved in crypto adoption, as well as utilise stablecoins. For people to be able to buy and use cryptocurrency from anywhere around the world, on-ramps help to link up the existing Traditional Banking Infrastructure to Digital Asset Ecosystems.

Payment Corridor

A payment corridor describes official or unofficial routes through which monetary transfers occur between countries. Factors like banking infrastructure, intermediaries, systems employed for currency conversion, systems used, and the alignment of regulations determine a corridor’s efficiency. Some payment corridors may be fast and inexpensive, while others may be slow and expensive. One of the crucial areas of modern financial innovations, especially with regard to cross-border payment systems, is the enhancement of payment corridors.

Peg

A peg is a mechanism used to keep a stablecoin’s value in line with a reference asset like the US dollar. It can be achieved through reserves, balancing out supply and demand, or algorithm trading corrections. Transaction volumes for payments, settlements, and treasury services in the digital dollar economy heavily depend on a strong peg and price stability.

PEP (Politically Exposed Person)

A Publicly Exposed Person (PEP) is a high-risk party that may have been in a significant position of public prominence. Such parties include, but are not limited to, members of governments or other senior political figures. These types of persons are subject to additional scrutiny through enhanced monitoring and enhanced customer due diligence.

Real-time gross settlement (RTGS)

Real-time Gross Settlement Systems (RTGS) allow individual and instantaneous transaction processing and settlements as opposed to batched transactions. The primary use of RTGS is for large-value interbank transfers. As each transaction is processed through an RTGS system, it reduces the settlement risk of that transaction. Additionally, because each RTGS transaction has finality at the time of settlement, it plays a vital role in the traditional financial architecture for providing a secure method of processing high-value payments.

Reconciliation

Reconciliation is the process of comparing data between two or more systems to ensure that there is consistency and accuracy within the systems. It can be very complicated to reconcile payments in international transactions due to several intermediaries, delays, and currency conversion. Automated reconciliation will give you a better view of your finances, cut down on errors, and boost efficiencies in your accounting and treasury processes.

Remittance

Remittances refer to money that is transferred internationally, but primarily to relatives (family) or people who rely on the sender (dependents). In addition to being one of the world’s largest international financial flows, traditional methods of sending remittances can be both costly and time-consuming. As such, there is significant potential for digital payment platforms and stablecoins to improve the time it takes to send and receive funds, as well as the cost associated with doing so.

Reserve Backing

The term reserve backing relates to the combination of assets that provide liquidity and stability to an underlying stablecoin. These reserves could be currency (cash), securities issued by governments, or other high-quality and liquid financial instruments. The transparency and quality of these reserves will have the ability of regulators to approve and/or oversee use of the stablecoin system. Ultimately, this factor contributes to maintaining price stability (peg) within fiat-backed stablecoin systems.

Sanctions Screening

The purpose of Sanctions screening is to verify that individuals, entities, and transactions have been checked against all Global Sanction Lists. This process provides an important tool in ensuring compliance with International Laws as well as preventing the misuse of funds via the Financial System. The sanctions screening is a key part of Anti-Money Laundering (AML) Systems of banks, fintechs, and cryptocurrency exchanges that help protect their clients from exposure to potential Regulatory or Reputational Risk.

SAR (Suspicious Activity Report)

A Suspicious Activity Report (SAR) is a report filed with regulatory bodies as a result of suspected or potential illegal financial activity. SAR filings are one of the most significant compliance obligations from Anti-Money Laundering (AML) rules. SAR filings assist governmental agencies investigating financial crime and tracking systemic risk in global financial systems.

SEPA

The Single Euro Payment Area (SEPA) is a payment integration project that will enable rapid standardised euro transfers across all SEPA member states. As such, it will reduce the costs, complexity, and transaction processing times associated with cross-border euro transactions inside Europe.

Settlement

Settlement is the last step in a financial transaction where money has been permanently moved from one party to another. While traditional settlement processes often require multiple days to complete, many of today’s payment systems, such as stablecoin and instant payment technologies, enable settlement to be accomplished within just minutes or even seconds. The faster settlement process enhances liquidity and diminishes counterparty risk.

Smart Contract

A smart contract is an executable program written on a blockchain that automatically carries out pre-defined procedures for parties involved in a financial transaction without any middlemen. A smart contract allows for programmable financial transactions (such as payments, loans, etc.) and is fundamental to decentralised finance and blockchain-based financial systems.

Spot Rate

The spot rate is an expression of a currency’s immediate worth in terms of another currency at the time of its purchase or sale in the world marketplace. As such, it is the basis for all foreign exchange transactions. It is used by everyone from multinational corporations to individuals. The spot rate reflects the prevailing supply/demand dynamics in the marketplace.

Stablecoin

A stablecoin represents a digital currency, which has been established in order to maintain a consistent price level (typically relative to a fiat currency, such as U.S. dollars). The characteristics of a stablecoin combine the advantages of blockchain technology (i.e., decentralised ledger, peer-to-peer transactions) with price stability (unlike cryptocurrencies), which makes stablecoins a viable option for use in payments, settlement activities, and treasury functions within digital-based economic systems.

Stablecoin Rails

The term “stablecoin rails” refers to the infrastructure used to move or transfer stablecoins. This includes various forms of blockchain, wallet services, application programming interfaces (“APIs”), and on- and off-ramps. In effect, stablecoin rails represent an alternative to banking rails; they enable fast, frictionless, and highly efficient global value transfers.

SWIFT

SWIFT is an interbank messaging system that provides for the efficient, worldwide exchange of standardised payment messages among banks. Swift does not actually move funds but rather provides the means for the rapid and accurate flow of information, which makes it possible for most international trade. It provides a structured method for banks to communicate with each other on behalf of their respective clients so they can send or receive payments across the world.

SWIFT GPI

SWIFT GPI is an improved version of SWIFT that improves the visibility, traceability, and speed of cross-border payments. It still depends on correspondent banking, but it will give better visibility into the status of payments and less uncertainty in international payments.

Transaction Monitoring

Transaction monitoring is a real-time process that analyses transactions to identify fraud, money laundering, or compliance breaches. It is a fundamental AML responsibility of financial institutions and crypto platforms to maintain regulatory compliance and the integrity of the financial system.

Travel Rule

The Travel Rule is a requirement that financial institutions disclose information about the senders and recipients of certain transactions. It is more transparent and can help prevent illegal financial transactions. It is being used more and more for crypto transactions within the global regulatory regimes.

USDC

USDC is a stablecoin backed by the reserves of regulated organisations with clear reserves. Its stability, compliance focus, and regulatory compliance make it widely used for payments, settlements, and institutional crypto transactions.

USDT

The United States Tether (USDT) is the largest stablecoin in terms of dollar-denominated reserves, accounting for most of all USD-pegged stablecoins, and provides an additional medium for cross-border transactions and exchange trading. Despite having a large presence globally with respect to liquidity, USDT still faces criticism surrounding how transparently the Reserve Accounts are managed; thus, USDT continues to be one of the focal points within global regulatory debates concerning the regulation of stablecoins.

VASP (Virtual Asset Service Provider)

A VASP is defined as any organisation that may be involved with the service associated with Virtual Assets, such as exchange, custody, etc. The term has been adopted by global authorities to require entities that provide such services to comply with anti-money laundering (AML) regulations.

Virtual Account

A Virtual Account is an organisational construct designed to segment and monitor various sub-accounts. This allows organisations to better reconcile transactions, track payments, and understand their cash position at any given time.

Vostro Account

A Vostro account is an account of a foreign bank with a domestic bank in the local currency. It facilitates international banking activities and settlement of cross-border transactions.

Wallet Address

The wallet address is a unique identifier that is used to send and receive cryptocurrencies on a blockchain network. It works similarly to an account number with traditional banking systems and is crucial for digital asset transactions.

Wallet Screening

Wallet screening is a process that involves examining blockchain addresses to determine their risk, compliance status, and potential involvement in illegal activities. It leverages blockchain analytics technologies to assist crypto ecosystems with AML and sanctions compliance.

Wire Transfer

A wire transfer is an international payment process that is direct and made between banks. It’s safe and popular, but slow and costly in comparison to today’s more modern digital or blockchain-based options. It is still an integral part of conventional cross-border banking.

Working Capital

Working capital is the amount of capital that is available for the day-to-day operations of a business, which is determined by subtracting current liabilities from current assets. The effective management of working capital enhances liquidity, flexibility, and financial strength. Faster settlement systems help optimise working capital by reducing cash lock-up.