Training Course on Stablecoins Masterclass - Application, Risks and Regulatory Focus

Training Course on Stablecoins Masterclass - Application, Risks and Regulatory Focus

Introduction

The digital asset landscape is rapidly evolving, with stablecoins emerging as a critical component bridging traditional finance (TradFi) and the burgeoning world of decentralized finance (DeFi). As their market capitalization surges, potentially reaching $1 trillion by the end of 2025, stablecoins are revolutionizing payments, remittances, and access to blockchain-based financial services. Their promise of price stability relative to assets like fiat currencies makes them indispensable tools for traders, DeFi participants, and increasingly, for mainstream financial applications, driving innovation in cross-border transactions and digital settlements.

However, the ascent of stablecoins is accompanied by significant challenges, including operational vulnerabilities, reserve management risks, counterparty risks, and the potential for de-pegging events. Regulators globally are responding with frameworks like the EU's Markets in Crypto-Assets (MiCA) regulation, aiming to mitigate risks related to financial stability, consumer protection, and illicit finance (AML/CFT). Understanding the intricate mechanics, diverse applications, inherent risks, and the complex regulatory environment surrounding stablecoins is now crucial for any organization or professional navigating the future of digital finance and blockchain technology.

Course Duration

10 days

Course Objectives

Upon completion of this masterclass, participants will be able to:

1. Define stablecoins and differentiate between fiat-backed, crypto-backed, commodity-backed, and algorithmic types.
2. Analyze the core mechanisms ensuring peg stability, including reserve management, minting/burning, and algorithmic adjustments.
3. Evaluate the key applications of stablecoins in digital payments, cross-border remittances, and e-commerce.
4. Assess the integration and role of stablecoins within DeFi protocols
5. Understand how stablecoins facilitate trading, arbitrage, and hedging strategies in volatile crypto markets.
6. Identify and analyze the spectrum of risks associated with stablecoins: market, liquidity, credit, counterparty, and operational risks.
7. Evaluate smart contract vulnerabilities and cybersecurity threats specific to stablecoin infrastructure.
8. Comprehend the global regulatory landscape for stablecoins, including key initiatives from the FSB, BIS, and major jurisdictions.
9. Analyze the specific requirements and implications of the EU's MiCA regulation for stablecoin issuers and CASPs.
10. Understand AML/CFT compliance obligations and risk mitigation strategies for stablecoin transactions.
11. Compare and contrast the design, purpose, and implications of stablecoins versus Central Bank Digital Currencies.
12. Explore future trends, including interoperability solutions, tokenization of real-world assets (RWAs) via stablecoins, and programmable stablecoins.
13. Develop frameworks for assessing, managing, and mitigating stablecoin-related risks within an organization.

Organizational Benefits

• Develop new financial products and services leveraging stablecoin technology.
• Streamline payment processes and reduce cross-border transaction costs.
• Gain entry into DeFi ecosystems for treasury management and yield generation.
• Make strategic decisions based on a clear understanding of stablecoin opportunities and threats.
• Proactively identify and manage financial, operational, and compliance risks associated with stablecoins.
• Navigate complex regulations like MiCA and ensure compliance readiness.
• Stay ahead in the rapidly evolving digital finance landscape.

Target Participants

1. Banking and Financial Services Professionals
2. Fintech Innovators and Product Managers
3. Regulatory and Compliance Officers
4. Legal Counsel specializing in Finance/Technology
5. Blockchain Developers and Solution Architects
6. Investment Analysts and Portfolio Managers
7. Corporate Treasury and Finance Managers
8. Government Officials and Central Bankers

 

Course Outline

Module 1: Foundations of Stablecoins

·         Defining Digital Assets and Cryptocurrencies

·         The Problem of Volatility: Introducing Stablecoins

·         Historical Context and Evolution

·         Role in Bridging TradFi and DeFi

·         Key Terminology (Peg, Reserve, Mint, Burn)

Module 2: Anatomy of Stablecoins: Types & Mechanisms

·         Fiat-Collateralized Stablecoins (USDT, USDC): Structure and Reserves

·         Crypto-Collateralized Stablecoins (DAI): Over-collateralization Models

·         Commodity-Collateralized Stablecoins (PAXG): Asset-Backed Tokens

·         Algorithmic Stablecoins: Models, Risks, and Lessons Learned (UST)

·         Hybrid Models and Emerging Designs

Module 3: The Stablecoin Ecosystem & Architecture

·         Issuance and Redemption Processes

·         On-Chain vs. Off-Chain Components

·         Role of Smart Contracts and Oracles

·         Custody Solutions for Reserves

·         Interoperability Across Blockchains

Module 4: Application Deep Dive: Payments and Remittances

·         Use Cases in Domestic & Cross-Border Payments

·         Reducing Transaction Fees and Settlement Times

·         Stablecoins in E-commerce and Point-of-Sale

·         Financial Inclusion Opportunities

·         Case Studies: Real-world Payment Implementations

Module 5: Application Deep Dive: Decentralized Finance (DeFi)

·         Stablecoins as Base Currency in DeFi

·         Lending and Borrowing Protocols (Aave, Compound)

·         Liquidity Provision in DEXs (Uniswap, Curve)

·         Yield Farming and Staking Strategies

·         Stablecoins in Decentralized Derivatives and Insurance

Module 6: Application Deep Dive: Trading and Treasury Management

·         Stablecoins as Trading Pairs on Exchanges

·         Arbitrage Opportunities Across Platforms

·         Hedging Against Crypto Market Volatility

·         Corporate Treasury Use Cases

·         Settlement Asset for Digital Securities

Module 7: Risk Analysis: Market & Peg Stability

·         De-Pegging Risk: Causes and Consequences

·         Market Risk of Reserve Assets

·         Liquidity Risk and Redemption Runs

·         Algorithmic Stability Failure Modes

·         Stress Testing Stablecoin Models

Module 8: Risk Analysis: Operational & Technical Risks

·         Smart Contract Bugs and Exploits

·         Blockchain Network Risks (Congestion, Reorgs)

·         Cybersecurity Threats (Hacking, Phishing)

·         Oracle Manipulation Risks

·         Operational Resilience Requirements (MiCA)

Module 9: Risk Analysis: Counterparty & Custody Risks

·         Issuer Insolvency Risk

·         Transparency and Auditing of Reserves

·         Custodial Risk for Reserve Assets

·         Third-Party Service Provider Risks

·         Governance Risks in Decentralized Models

Module 10: Global Regulatory Landscape Overview

·         Financial Stability Board (FSB) Recommendations

·         Bank for International Settlements (BIS) Principles

·         FATF Guidance on Virtual Assets and VASPs

·         Cross-Jurisdictional Regulatory Challenges

·         Trends in Global Stablecoin Oversight

Module 11: Regional Regulatory Focus: EU (MiCA)

·         Overview of MiCA Framework for Crypto-Assets

·         Rules for E-Money Tokens (EMTs)

·         Rules for Asset-Referenced Tokens (ARTs)

·         Authorization, Capital, and Reserve Requirements