Stablecoin remuneration on centralised exchanges

Key takeaways 

• Centralised exchanges remunerate stablecoin holders, using the return on the issuer's reserve assets or income from market activity.
• Under the reserve-based model, yields track policy rates – akin to yields on cash-management instruments – whereas under the activity-based model, yields are much more volatile.
• By turning stablecoins into substitutes for bank deposits or money market funds or into funding instruments for exchanges' risky activities, remuneration models may shape the macro financial implications of wide stablecoin adoption in the future.

The views expressed in this publication are those of the authors and do not necessarily reflect the views of the BIS or its member central banks.