Definition
A stablecoin is a crypto-asset whose value is stabilised by reference to an underlying asset, most often a fiat currency (USD, EUR).
The goal: combining the properties of blockchain (instant, programmable, global, 24/7 transfers) with the stability of a currency, where Bitcoin or Ethereum are volatile. The market is worth more than $250bn at the end of 2025, dominated by USDT (Tether, ~$180bn) and USDC (Circle, ~$70bn), ahead of EURC and DAI/USDS. In Europe, MiCA has regulated it since 30 June 2024 (Titles III and IV on EMTs/ARTs).
The types of stablecoins
- Fiat-backed: backed 1:1 by a fiat currency (cash + Treasury bills) — USDT, USDC, EURC. The most used, the EMT category under MiCA.
- Crypto-backed: backed by cryptos with over-collateralisation (150–200%) — DAI. The ART category.
- Algorithmic: with no collateral, value maintained by mint/burn — TerraUSD, whose May 2022 collapse left a mark. Rare and contested.
- Commodity-backed: backed by a tangible asset (gold) — PAX Gold, Tether Gold.
Major players
- Tether (USDT): the oldest (2014) and the largest, but controversial (reserve transparency) and not MiCA-compliant, hence a gradual delisting from European CASPs in 2024–2025.
- Circle (USDC, EURC): a US issuer listed on the NYSE since June 2025, with audited reserves (100% cash + Treasury), MiCA-compliant (EMI authorisation via the ACPR to issue USDC and EURC in the EU).
- Sky / formerly MakerDAO (DAI/USDS): a DeFi protocol, collateralised in crypto and RWA.
MiCA: EMT and ART
- EMT (E-Money Token): backed by a single currency, issued by an authorised EMI or credit institution, with 1:1 reserves. MiCA caps "significant" non-EUR EMTs at €200m of transactions per day, to support the euro. Examples: USDC EU, EURC, EURI.
- ART (Asset-Referenced Token): backed by a basket of assets, requiring a specific authorisation. No major ART stablecoin to date.
Use cases
- Cross-border: sending USDC costs ~$0.01 in 5 seconds, versus $30 and 3 days via SWIFT. Heavily used in Argentina, Turkey and Nigeria as a "pocket digital dollar", and growing for remittances.
- Merchant payment: still marginal in the EU (recent framework), but attractive (0.1 to 0.5% vs 1 to 3% for cards) via Stripe Crypto, Coinbase Commerce, BitPay.
- Trading / DeFi: the reference currency of exchanges (liquidity, lending, yield).
- Web3 treasury: for a crypto-native company, the stablecoin replaces the operating account.
Stablecoins vs CBDC
| Aspect | Stablecoin | CBDC (digital euro) |
|---|---|---|
| Issuer | Private (Circle, Tether) | Central bank (ECB) |
| Regulation | MiCA / variable | Sovereign |
| Status | Crypto-asset (EMT) | Central bank money |
| Privacy | On-chain pseudonym | Anti-tracking targeted for small amounts |
| Launch | 2014+ | Pilots, launch 2027+ |
The digital euro, being prepared by the ECB, positions itself as the public alternative to private stablecoins.
Risks
- Depeg: USDC dropped to $0.87 during the SVB crisis (March 2023).
- Seizure: Tether and Circle can freeze wallets upon sanction.
- Collapse: TerraUSD wiped out $60bn in 2022.
- Systemic: a collapse of USDT (~$180bn) would destabilise the whole of crypto.
- Sovereignty: ~95% of supply is in USD, hence the promotion of EURC and EURI in Europe.
What stablecoins are not
- Not central bank money: private money, guaranteed by the issuer's reserves.
- Not immune to fluctuations: the depeg risk is real.
- Not anonymous: on-chain transactions are public, wallets KYC'd via exchanges.
- Not legally "money": regulated as crypto-assets (EMT), not as euros or dollars.
- Not universally accepted: stablecoin merchant payment remains marginal in the EU.
In the PSD2 / Open Finance ecosystem
Outside the direct scope of PSD2, but converging: issuers fall under CASP (MiCA), modern PSPs (Stripe, Adyen) integrate stablecoin payments, cross-border B2B competes with SWIFT and SCT Inst, and banks are exploring deposit tokenisation (JPM Coin, Onyx), at the border of stablecoins.
Concrete examples
- USDC: used by Coinbase, MetaMask, Stripe Crypto, Visa B2B Connect.
- EURC: issued by Circle since 2022, growing fast (from ~€70m in early 2025 to ~€300m at the end of 2025).
- USDT in Argentina: a large share of the population uses it as savings against inflation.
- Stripe Crypto: since 2024, US merchants can receive USDC (optional fiat settlement).
- PayPal USD (PYUSD): launched in 2023 on Ethereum and Solana, integrated into Venmo.
- Tether treasury: ~$140bn in US Treasury bills at the end of 2025, one of the world's largest holders of US debt.
- MiCA impact: USDT gradually delisted from European CASPs for lack of EMT compliance, in favour of USDC and EURC.