Duration
Macaulay durationmodified duration
A measure of price sensitivity to interest-rate changes, expressed in years.
For fiat-backed stables, the duration of the reserve portfolio matters: longer-duration T-bills earn more but mark-to-market lower if rates spike, which can produce reserve shortfalls in a rising-rate / redemption-spike regime. Most major issuers cap reserve duration at 90 days to neutralise this.
Related terms
- T-bill (US Treasury bill)A short-duration (≤ 1 year) US government debt instrument — the primary reserve asset for major fiat-backed stables.
- ReservesThe assets backing a stablecoin's outstanding liabilities — for fiat-backed stables, predominantly cash + Treasuries.
- Money-market fundA regulated mutual fund holding short-duration government / corporate paper, structured to maintain stable NAV.