Today, USDT can be issued on many blockchains, including Bitcoin, Ethereum, EOS, Tron, Algorand, and OMG Network. USDT can be used like any other currency or token on supported networks. You can add a stablecoin to your crypto portfolio to minimize the risks of volatility. You can be sure that some portion of your investment will not lose value. It seems complicated, but Maker’s Dai stablecoin actually works that way. The value is pegged to the U.S. dollar and the reserve is made up of Ether coins locked up in smart contracts.
An active network
Not every institution begins with full-stack stablecoin infrastructure. But over time, as internal expertise and regulatory clarity grow, firms move toward more direct control of custody, execution, and treasury. This transition, from Crypto-Remote to Crypto-Inside, is increasingly measured in months, not years. USDC enables businesses to offer payment connectivity and dollar-backed financial services to more people in more places.
- This article explores stablecoin fundamentals, types, use cases, and the transformative potential of stablecoins in the financial ecosystem.
- This guide focuses exclusively on fiat-backed stablecoins, which dominate real-world payments use cases due to their regulatory compatibility, operational resilience, and growing institutional adoption.
- Payouts that once took days now happen instantly, regardless of banking hours or recipient geography.
- They could also be based on the value of gold or index funds consisting of multiple commodities.
Stablecoin fundamentals
A stablecoin worth $1 aims to maintain the price of $1; nothing more, nothing less. Stablecoin systems rely on blockchain infrastructure and smart contracts, which introduce a new class of operational risk not typically present in traditional payment systems. In regions with limited banking access, stablecoin payouts can increase financial inclusion, allowing recipients to receive USD-equivalent payments without needing a traditional bank account.
Fully backed, fast, designed for stability, and built for global business. First stablecoins to be approved as recognized crypto tokens by the Dubai Financial Services Authority (DFSA). Join the thousands of visionary companies building with Circle for near-instant, low-cost, global stablecoin transactions.
From blockchain to bank: How stablecoins are reshaping global money movement
Some services may not be available in all locations, so be sure to check whether the options you want are available where you live. Exchanges like Coinbase may offer some stablecoins, but such centralized exchanges may list fiat-backed versions only. For more options, you could use a decentralized exchange to swap any existing tokens for most stablecoins. Because the backing asset can be volatile, crypto-backed stablecoins are overcollateralized to ensure the stablecoin’s value. For example, a $1 crypto-backed stablecoin may be tied to an underlying crypto asset worth $2, so if the underlying crypto loses value, the stablecoin has a built-in cushion and can remain at $1.
Where Fiat-Backed Stablecoins Are Used in Payments
In addition to its algorithm-based stablecoin are the Reserve Rights utility token (RSR) and a selection of other cryptocurrencies that are held as collateral to back RSV stablecoins. It is possible to collateralize stablecoins with other cryptocurrencies. In that case, the coin’s value might be pegged to the euro, but the reserves would be held in cryptos. Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through patent-pending SGX & MPC technology. Platforms like Mesh allow users to pay with any crypto they hold, converting to USDC or fiat in the background.
The stablecoin landscape seems like something far away for you and something you might not know how to include in your projects? We have compiled a consistent knowledge hub with information for you https://youtu.be/ilOtZhll4Ns?si=ihAggC33I4gsjoxF to discover all the possibilities that blockchain and digital currencies can bring to your business. Tether (USDT) is the world’s first stablecoin, the largest in terms of market capitalization, and the most transacted stablecoin in the market. Pegged to the U.S. dollar on a one-to-one basis, Tether claims its coin is backed 100% by a diverse mix of assets, most of which can be viewed on its website. Smart contracts on Stellar enable a variety of new DeFi use cases on Stellar, allowing businesses to offer everyday financial services to their end-users.
