What are stablecoins?
Tokens designed to keep a stable value, usually 1 US dollar: how USDT and other stablecoins keep their peg.
A stablecoin is a cryptocurrency designed to keep a stable value, most often 1 US dollar. Stablecoins combine the speed of blockchain transfers with a value that does not swing like Bitcoin's.
Main types
- Fiat-backed — the issuer holds reserves (cash, short-term government bonds and similar assets) and issues tokens against them. Examples: USDT (Tether) and USDC (Circle).
- Crypto-backed — tokens are created by smart contracts against crypto collateral worth more than the issued amount. Example: DAI.
- Algorithmic — try to keep the peg with supply rules and incentives instead of full reserves. Some of these have failed dramatically.
What they are used for
- Moving value between exchanges and wallets quickly.
- Quoting prices: most crypto pairs are traded against USDT.
- Keeping funds in a dollar-like asset without leaving crypto.
- Cross-border payments.
The peg
For fiat-backed stablecoins, the peg is maintained because large holders can redeem tokens with the issuer for dollars, and the issuer can create new tokens for dollars. Market prices can still move slightly around 1.00.
How to check a stablecoin
- Who issues it and under which rules.
- What backs it — cash and short-term bonds, crypto collateral or only an algorithm.
- Reserve reports — how often they are published and by whom.
- Redemption — who can exchange tokens for the underlying asset and on what terms.
- Market price — whether it has stayed close to 1.00 over time, including during market stress.
On XFasil
The main balance of a XFasil wallet is in USDT. Deposits and withdrawals use USDT on the TRON (TRC-20) network. Read USDT on different networks.
University materials are for education only and are not investment, legal or tax advice.