Beginner guide
What is a stablecoin (like USDT)?
Stablecoins explained: how USDT and USDC try to stay at one dollar, and why some have broken their peg.
Short answer
A stablecoin is a token designed to stay at a fixed value, usually one US dollar. Most are backed by cash and short-term bonds held by a company. 'Stable' does not mean risk-free.
Common questions
Is USDT the same as a dollar in a bank?
No. It is a claim on the issuer, Tether, and is not bank-insured.
Can a stablecoin lose its peg?
Yes. Some have, most famously TerraUSD in 2022, which was not backed by cash.
Why do people use stablecoins?
To move dollar value quickly, and to hold value between trades without leaving crypto.
Are stablecoins regulated?
Increasingly. The US GENIUS Act and the EU's MiCA set rules for issuers.
Learn it properly (free)
- What Is a Stablecoin? Explained Simply
- What Is USDT?
- How stablecoins keep their peg (and why some break)
- What Is the GENIUS Act?
- What is MiCA (EU crypto regulation)?
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Education only. Not investment advice. We do not pick coins.