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TECHNOLOGIES

# Stablecoin

A blockchain token designed to hold a steady value, usually one unit of a fiat currency, so you can transact on-chain without crypto's price swings.

Last reviewed: 2026-06-02 by [Kevin Riedl](/team/kevin-riedl/) [wiki ↗](https://www.wikidata.org/wiki/Q139796365)

A stablecoin is a token that tries to stay pegged to a stable asset, almost always the US dollar. The point is to keep the settlement speed and global reach of a blockchain without the volatility that makes Bitcoin or ETH useless as a unit of account. You can hold, send, and receive a stablecoin like email for money: final in seconds, across borders, without a bank in the loop. That is the genuine use case, especially for payments and remittance into and out of regions with weak banking infrastructure.

How the peg holds defines the risk. Fiat-backed stablecoins (USDC, USDT) hold real dollars and treasuries in a bank account and mint one token per dollar. The peg is only as good as the reserves and the issuer’s honesty, which is why reserve attestations matter. Crypto-collateralised stablecoins (DAI) overcollateralise with on-chain assets, trading custody risk for liquidation risk in a market crash, and they are the backbone of most [DeFi](/glossary/defi/) lending. Algorithmic stablecoins try to hold the peg with supply mechanics and no real backing, and the graveyard (Terra/UST, billions evaporated) is the reason serious operators avoid them.

The EU regulatory picture is now concrete, not theoretical. Under MiCA, stablecoins (e-money tokens and asset-referenced tokens) are explicitly in scope, with reserve, disclosure, and issuer-authorisation requirements, and the rules constrain how non-euro stablecoins can be used for everyday payments at scale within the bloc. For any business building payment flows on stablecoin rails in Austria or the wider EU, the question is no longer “is this allowed” but “which coin, issued by whom, under which authorisation”. That is a design decision to make before you write the integration, because retrofitting compliance onto a launched payment product is the expensive path.

We built payment infrastructure on stablecoin rails (Scramble) and worked on stablecoin-adjacent systems (Zybra), so the position is grounded: stablecoins are the most genuinely useful [web3](/glossary/web3/) primitive for moving value, and the peg is never free. Always know what backs the coin, who can freeze it, and what happens in a run. Our [blockchain work](/services/blockchain/) treats the peg model as a first-class design decision.

// FAQ

## FAQs

### What is a stablecoin?

A blockchain token engineered to hold a steady value, almost always one US dollar, so you can settle on-chain in seconds across borders without crypto’s volatility. It is the closest thing crypto has to digital cash.

### Fiat-backed vs algorithmic stablecoins?

Fiat-backed coins (USDC, USDT) hold real dollars in reserve and are only as trustworthy as those reserves and the issuer. Algorithmic stablecoins hold the peg with supply mechanics and no real backing, and they have a long history of collapsing (Terra/UST). Serious operators stick to well-attested fiat-backed or overcollateralised coins.

### How safe is the peg?

Never free. Fiat-backed coins carry reserve and freeze risk (the issuer can blacklist an address). Overcollateralised coins carry liquidation risk in a crash. Algorithmic coins carry de-peg-to-zero risk. Always know what backs the coin, who can freeze it, and what happens in a bank run.

Related terms

- [DeFi](/glossary/defi/)
- [Web3](/glossary/web3/)
- [Blockchain](/glossary/blockchain/)

Related services

- [Blockchain](/services/blockchain/)

Related case studies

- [Scramble Pay](/case-studies/scramble-pay/)
- [ZybraMoney](/case-studies/zybra-money/)

Related guides

- [How to choose a software development agency](/software-development-guide/how-to-choose-a-software-agency/)

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