Crypto glossary
Stablecoin
A stablecoin is a cryptocurrency designed to hold a steady value, usually one US dollar, backed by reserves such as cash, Treasury bills or other crypto.
Stablecoins give crypto users a dollar-like unit that moves on blockchains at any hour. The largest, Tether's USDT and Circle's USDC, are fiat-backed: the issuer holds cash and short-term government debt and promises to redeem each token for one dollar. Others, such as DAI, are backed by crypto collateral locked in smart contracts, usually worth more than the coins issued.
They are the main trading pair on exchanges, the base asset of most DeFi lending and an increasingly common tool for cross-border payments and savings in countries with high inflation.
A stablecoin is only as stable as its reserves and redemption process. Algorithmic designs without solid backing can fail, as TerraUSD did in May 2022, and even backed coins can briefly lose their peg, as USDC did in March 2023 when part of its reserves sat in the failed Silicon Valley Bank. In the EU, MiCA regulates stablecoins as e-money or asset-referenced tokens, and the US passed the GENIUS Act in July 2025.
Example
A freelancer in Argentina is paid 500 USDC, keeps the money in a self-custody wallet to avoid peso inflation and later sends part of it to a relative in Spain for a few cents in network fees.
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