Educational information, not financial advice.
stablecoins are tokens that track a currency, usually the US dollar. They are popular for trading and cross-border payments.
How they work
An issuer holds reserves and promises to redeem each token for 1 dollar. The US GENIUS Act (signed 18 Jul 2025) requires 1:1 reserves in liquid assets and monthly public disclosure. In the EU, MiCA regulates them as e-money and asset-referenced tokens.
The trade-off
- Issuer risk. You trust the issuer, its bank and its auditors.
- Freezes. Under the GENIUS Act, issuers must be able to "seize, freeze, or burn" tokens when legally required.
- Debasement. A dollar stablecoin loses purchasing power just as the dollar does.
Bitcoin's answer
Bitcoin has no issuer to fail, freeze or print. Its value moves, but its supply does not. For short-term spending in dollars, a stablecoin can be practical. For savings no one can debase or freeze, that is the gap bitcoin fills.