# How lending capital, stablecoins and FZR differ.

Canonical page: https://finanzer.ai/learn/funding-fzr-and-stablecoins

> A loan, its funding currency and a protection arrangement have separate roles. Understanding each one helps explain who receives funds, who owes repayment and who may bear a loss.

A loan, its funding currency and a protection arrangement have separate roles. Understanding each one helps explain who receives funds, who owes repayment and who may bear a loss.

## Separate the loan from the assets around it.

Follow the role and contractual rights of each position.

### The loan

The borrower owes repayment. The lender’s rights are set out in the financing agreement.

### The funding currency

Fiat or supported stablecoins move the funds to the borrower and carry repayments back.

### The FZR risk stake

A participant can voluntarily accept defined loss exposure under a separate risk mandate.

### The payout funds

Money must be available to pay an eligible claim after authorised assessment.

## Trace both the exposure and the payout funds.

An FZR risk stake may carry agreed loss exposure. Paying a valid claim still requires available funds and an authorised payout process. The token’s market value alone does not establish that capacity.

[Understand FZR protection](https://finanzer.ai/fzr)

## Common questions

### Can FZR protection replace lending capital?

In the proposed model, lender cash or stablecoins fund the borrower. FZR risk participation is a separate arrangement; it does not itself supply the loan principal.

## Continue with FZR protection.

See how this process fits into the product Finanzer is developing.

[Understand FZR protection](https://finanzer.ai/fzr)

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