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StablecoinsA stablecoin is a type of cryptocurrency created to remain stable in value. Specifically, a stablecoin's value is usually pegged to that of another asset, such as the US dollar. That way, it can maintain a fixed worth. For example, popular stablecoins like Tether (USDT) and USDC were designed so that one token would always equal roughly one US dollar. Many see stablecoins as a place to park money during times of volatility—whether that's in the crypto markets themselves, or for people living in nations with unstable national currencies. When stablecoins are pegged to a stable fiat currency like the US dollar, they offer a way to ensure one's funds remain valuable. Although less common, stablecoins can also be pegged to commodities like gold, or even other cryptocurrencies—the stablecoin DAI, for instance, is backed by ethereum. Notably, stablecoins are actually considered tokens rather than coins. Tokens are built on top of an existing blockchain, rather than running on their own blockchain, the way a coin (like bitcoin) would.Explore Stablecoins

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The different types of stablecoins include algorithmic stablecoinsIn addition to fiat-backed stablecoins, commodity-backed stablecoins, and cryptocurrency-backed stablecoins, algorithmic stablecoins use smart contract-based mechanisms to maintain a stable value by responding to supply and demand. Kraken Some argue that stablecoins are unnecessary due to the ubiquity of the US dollarOthers have criticized fiat-backed stablecoins for their lack of decentralization, believing that digital currencies not controlled by central banks will become more popular in the future. Investopedia Stablecoins' market cap surged during 2021's crypto bull marketIn 2020, the value of all stablecoins was equivalent to just 1% of all physical US dollars. Roughly five years later in August 2025, that value had jumped to roughly 11% of all US cash in circulation. Visual Capitalist Stablecoins could give people in high-inflation economies access to stronger currenciesSpecifically, stablecoins could provide a way to make sure these funds remain valuable during times of volatility. Some examples of people without access to the US dollar using stablecoins as a store of value have been observed in Venezuela. JP Morgan Stablecoins like USDC are backed by real assets including US Treasurys and cashWhile Tether (USDT) is primarily backed by US Treasury bills (64.9%), USDC is mostly backed by US Treasury repurchase agreements (49.6%). USDC also goes by the name Circle, given that it is owned by the company Circle Internet Financial. Visual Capitalist The world's largest stablecoins by market capThe largest stablecoin by market cap, Tether (USDT), as well as the second largest, USDC, are both pegged to the US dollar. As of April 2026, Tether had a roughly $184B market cap. CoinMarketCap Stablecoins now transfer more value than Visa or MastercardBecause stablecoins operate on public blockchains, transfers can occur nearly instantly without intermediaries, unlike traditional credit card networks. This has fueled stablecoins' adoption within the crypto world and in cross-border payments. Stablecoin transfer volume rose from $3.3B in 2018 to $18.4T in 2024, overtaking Visa's $15.7T and Mastercard's $9.8T. Visual Capitalist Learn how stablecoins function in just 4 minutesThis video explains the basics of stablecoins in a beginner-friendly manner. It also dives a bit deeper into the larger stablecoin landscape, detailing, for instance, the many stablecoins backed by fiat currency other than the US dollar, like the euro, the Turkish lira, and the Singapore dollar. Binance TerraUSD offers a cautionary tale of stablecoin useThis stablecoin was completely wiped out in May 2022, losing investors roughly $40B in value, when its linked support token, LUNA, collapsed in value, triggering a spiral that wiped out the dollar peg and left both tokens essentially worthless within days. TerraUSD's creator was sentenced to 15 years in prison in 2025. (Some users may experience a paywall.) The New York Times DAI is a popular stablecoin backed by cryptocurrency rather than fiat currencyDAI is backed by collateralized debt denominated in several major cryptocurrencies, including ethereum's ether. It was created by Rune Christensen in 2017 with the goal of helping create a credit system that would allow users to take out loans collateralized by cryptocurrencies. Kraken Collaterized by crypto, BitUSD is considered the first stablecoinIt was created in 2014 with the intention of making cryptocurrency less volatile. While BitUSD lost its peg to the US dollar in 2018 and never recovered, Tether was created soon after it in 2014 and has had more longevity and success. TradingView The stablecoin market increased tenfold from 2020 to 2025Specifically, the stablecoin market grew from about $28B in 2020 to $282B in 2025. Some experts forecast that it could grow anywhere from 6.7x to 14.2x by 2030. Visual Capitalist The GENIUS Act passed in the US in 2025 was a major milestone for stablecoin regulationGENIUS stands for the "Guiding and Establishing National Innovation for US Stablecoins." The GENIUS Act defines payment stablecoins as digital money rather than investments and was the first significant piece of stablecoin legislation in the United States. Fidelity The first stablecoin pegged to the US dollar launched in 2014That coin was Tether, also known as USDT. Other key dates in stablecoin history include Circle's launch of USDC in 2018, and, more recently, President Donald Trump's signing of the GENIUS Act in 2025. Visual Capitalist USDC's reserves were held at Silicon Valley Bank when the bank collapsedOne of the world's largest stablecoin's reserves were held at Silicon Valley Bank, which famously failed in March 2023. USDC briefly lost its peg to the US dollar for a time as a result, within investors pulling out billions of dollars. CNBC

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