18 Stablecoins to Know

Stablecoins are a type of cryptocurrency meant to be “pegged” to or closely match the value of another currency or financial asset — like the United States dollar or gold — to stabilize its pricing in the cryptocurrency market. True to their name, stablecoins are intended to be a stable crypto option to invest in, especially when compared to currencies that can have high volatility, like Bitcoin or Ether.

Although stablecoins only make up a portion of the larger crypto market, they are popular among people who want to participate in the decentralized finance system.

What Is a Stablecoin?

A stablecoin is a cryptocurrency with a value that is tied to that of another financial asset like gold, the U.S. dollar or a fiat currency. This way, the prices of stablecoins remain steady and serve as a safer alternative to more volatile cryptocurrencies.

To maintain the prices of stablecoins, some issuers claim to have dollars or other physical assets that are equal to the total volume of stablecoins issued. For others, they may use an algorithmic method to automatically encourage the sale of coins to regulate their value relative to the dollar.

As with any other cryptocurrency investment, even stablecoins can be volatile and susceptible to bugs, errors and loss. Be sure to only use crypto exchanges and crypto wallets that are secure and manage your finances responsibly.

Types of Stablecoins

Depending on the mechanism used to stabilize their value, stablecoins can be organized into three different buckets: 

Algorithmic Stablecoins

Algorithmic stablecoins use algorithms and smart contracts to manage the supply of the tokens issued. The system will reduce the token supply if the price falls below whatever fiat currency it tracks through methods like burning or buybacks. If the price surpasses the value of the fiat currency, new tokens will be put into circulation to reduce the stablecoin’s value. 

Crypto-Backed Stablecoins

Crypto-backed stablecoins use other cryptocurrencies as collateral and smart contracts to monitor the minting and burning of the coin. This is intended to make the process more reliable, since users can independently audit the contracts. Some of these crypto-backed stablecoins are also run by DAOs, where the community can vote on changes. 

Fiat-Backed Stablecoins

Fiat-backed stablecoins use government-issued currency like the U.S. dollar as collateral. Users can convert from fiat into a stablecoin and vice versa at whatever the pegged rate is. And if the price of the coin falls below the underlying fiat, investors can use arbitration methods to bring the price back to a fixed rate — simultaneously purchasing and selling the same asset on different markets.

Stablecoins to Know

Tether

Tether USDt (USDT), the company’s namesake currency, is one of the oldest stablecoins on the market. Tether has variants of its stablecoin pegged to other fiat currencies outside of the U.S. dollar, including to the euro (EURt), Mexican peso (MXNt) and Chinese yuan (CNHt). It also has a token backed by physical gold known as Tether Gold (XAUt).

USD Coin

USD Coin (USDC) is a popular stablecoin that is pegged to the U.S. dollar. It was launched in 2018 through a consortium called Centre that was created by fintech giants Circle and Coinbase. USDC can be sent and received instantly through Circle or on crypto exchanges, and can be integrated into apps and dApps as a payment method.

Dai

Dai (DAI) runs on the Ethereum blockchain, and algorithmically attempts to keep itself tied to the U.S. dollar. Unlike centralized stablecoins, Dai isn’t backed by U.S. currency in a bank account. Rather, it is backed by collateral in the MakerDAO platform, a decentralized autonomous organization that also exists on the Ethereum network — allowing people to lend and borrow using cryptocurrencies. If the Dai credit system gets upgraded or shut down, holders may need to convert their Dai to Ethereum cryptocurrency through the Maker platform.

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First Digital USD

Created by First Digital Labs, First Digital USD is a token designed to have an equivalent value of one U.S. dollar and secured by a custodian with a trust license. In addition, collateral is validated by an independent third party, lending transparency and credibility to any kind of financial reporting. First Digital USD is currently available on Ethereum, BNB Chain and SuiVision, with the goal of expanding to more blockchains.

Ethena USDe

Ethena USDe is built on the Ethereum blockchain and is known as a “synthetic dollar.” This is because the protocol aims to achieve stability by having users simultaneously buy an asset and sell the derivative — a tradable financial contract — of that asset. Ethena relies on this cash-and-carry approach to generate yield, although the strategy has drawn some concerns due to the higher risks associated with it. 

PayPal USD

PayPal USD (PYUSD), launched by payments platform PayPal, is a stablecoin pegged to the U.S. dollar. The stablecoin is backed by secure dollar deposits, U.S. treasuries and cash equivalents to keep it matched to a $1 value. PayPal USD can be bought, sold, sent, received and converted to other currencies through PayPal, and can also be used as a payment method when checking out in online stores using PayPal.​

TrueUSD

Reportedly the first regulated stablecoin backed by the U.S. dollar, TrueUSD (TUSD) is among the most famous of all the stablecoins. Users can invest in it to not only earn, but also hedge against the volatility of any crypto assets they own. They can also trade TrueUSD on over 80 exchanges, markets and over-the-counter desks around the world, as well as stake, farm and mine TrueUSD on other DeFi platforms like Ethereum, TRON or BNB Smart Chain.

Frax

Frax (FRAX), a coin pegged to the U.S. dollar, operates on a “fractional-algorithmic” mechanism for its stablecoin, meaning it is partially backed by collateral and partially stabilized algorithmically. In addition to Frax, the company has FPI, which is pegged to the U.S. Consumer Price Index, and frxETH, which is pegged to Ether (ETH). Frax aims to provide “highly scalable, trustless, and ideologically pure on-chain money” in place of fixed-supply digital assets like Bitcoin.

Pax Gold

Pax Gold (PAXG) is a digital currency that is backed by genuine, physical gold. Gold-backed cryptocurrency is a less common class of stablecoin, but it is one that may stand to outperform the wider crypto market during volatility. Pax Gold is one of the largest gold-backed stablecoins on the market.

Pax Dollar

Pax Dollar (USDP) is a stablecoin regulated by the New York State Department of Financial Services, and its reserves are held in cash and cash equivalents, which means customer funds are reportedly safe and available for redemption at all times. In addition, customer assets are protected from being used to pay off any debts in the event that Paxos files for bankruptcy. 

Gemini Dollar

Gemini dollar (GUSD) is an ERC-20 token on the Ethereum blockchain and is fully regulated by the New York State Department of Financial Services. No-fee conversions from U.S. dollars to Gemini dollars also make this stablecoin more accessible. As a result, Gemini users can make purchases with Gemini dollars on networks like OpenSea, conducting trades, saving and sending quick payments.   

USDX

USDX is a stablecoin built to operate on the Kava blockchain. Users can deposit digital assets on the Kava network as collateral once they’ve moved their assets to the Binance Chain. Assets stored on Kava can be used to create new USDX tokens through minting. Another way to generate returns is to move USDX tokens to the Kava Lend network — a market that converts crypto into assets with interest that can be given out as loans to other users.  

Binance

Binance USD (BUSD) was originally issued through a partnership between its namesake, cryptocurrency infrastructure provider Binance, and crypto asset exchange Paxos. It launched in 2019 and managed to reach a market capitalization peak of over $100 billion in 2021. As a company, Binance offers various other services in the digital asset space as well, including crypto wallets, savings accounts and even NFTs (non-fungible tokens).

In February 2023, Paxos announced it would stop minting new BUSD coins. However, Binance will continue to support the sale of BUSD “for the foreseeable future.”

EURS

STASIS EURO (EURS) is a digital token developed by STASIS that is pegged to the Euro. While it is still quite small compared to its U.S. counterparts, STASIS claims that EURS is the world’s largest Euro-backed stablecoin on the market. And because its reserves are in accounts of partner institutions, STASIS says its coin has an “unrivaled level of reserve transparency.”

Liquity USD

Liquity USD (LUSD) was created by Liquity, a decentralized borrowing protocol that allows you to draw 0 percent interest loans against Ether as collateral. The loans are paid out in LUSD, which is pegged to U.S. dollars, and must maintain a minimum collateral ratio of only 110 percent. The loans are also secured by a stability pool, which contains LUSD, and by fellow borrowers collectively acting as guarantors.

Celo Dollar

Like many other stablecoins, the Celo Dollar (CUSD) is pegged to the U.S. dollar. It is also native to the Celo Reserve blockchain system, which hosts a portfolio of cryptocurrencies to expand and contract the supply of Celo Dollars and support the overall Celo protocol. This influences its value on the crypto market as well.

Reserve Rights

Reserve Rights (RSR) is an asset-backed ERC-20 stablecoin on the Reserve Protocol (called a type of RToken). The protocol and the Reserve Ecosystem work to build tools that people can use to create and implement other stable currencies around the world. Reserve Protocol states that it is the first platform allowing for the “permissionless creation of asset-backed, yield-bearing and overcollateralized stablecoins on Ethereum.”

Origin Dollar

Built by Origin Protocol, Origin Dollar (OUSD) is a stablecoin that can earn a yield while it’s still in a user’s wallet. Because yields are generated automatically through open-source, on-chain yield farming strategies while remaining in the user’s custody, they can earn passively while maintaining control.

Frequently Asked Questions