Basics · 4 of 9Beginner4 min read
Stablecoins Explained
How dollar-pegged coins like USDC and USDT keep their value, and the risks to understand before you rely on them.
Updated Oct 15, 2026
What a stablecoin is
A is a token designed to stay worth a fixed amount, usually $1. They're popular for barter because the price doesn't swing while you're negotiating.
How they hold the peg
- Fiat-backed (USDC, USDT, PYUSD): a company holds cash and short-term bonds and lets approved customers swap 1 token for $1.
- Crypto-backed / synthetic (USDe, Sky's USDS): backed by other crypto or trading strategies, managed by smart contracts.
The risks
- De-peg: the price can briefly slip below $1 if people doubt the reserves.
- Issuer control: fiat-backed issuers can freeze tokens at specific addresses.
- Network fees: you still need the chain's native coin to move them.
Stablecoins are handy for pricing and quick payments, but they're only as trustworthy as whatever backs them.
Key takeaways
- Stablecoins aim for $1 but aren't guaranteed.
- Know what backs the one you use.
- You still pay fees in the native coin.
Related coin guides
Educational use only. Not financial advice. Always do your own research.