{"id":10054,"date":"2026-06-09T10:16:11","date_gmt":"2026-06-09T10:16:11","guid":{"rendered":"https:\/\/paybis.com\/blog\/?p=10054"},"modified":"2026-10-29T08:08:38","modified_gmt":"2026-10-29T08:08:38","slug":"what-are-stablecoins-and-how-do-they-work","status":"publish","type":"post","link":"https:\/\/paybis.com\/blog\/what-are-stablecoins-and-how-do-they-work\/","title":{"rendered":"What Are Stablecoins and How Do They Work?"},"content":{"rendered":"<div class=\"text-bg-color\" id=\"block_dc1d3712979a4686001ff3beb3d994dc\">\r    <div class=\"text-bg-color__content\">\r        <div class=\"text-bg-color__title\">Key Takeaways<\/div>        <ul>\n<li><a href=\"https:\/\/paybis.com\/blog\/glossary\/what-is-a-stablecoin\/?utm_source=chatgpt.com\">Stablecoins<\/a> are digital assets pegged to the dollar. One USDC stays at one dollar regardless of what the rest of the market does.<\/li>\n<li>Stablecoin transfers settle in seconds to minutes, not days.<\/li>\n<li>Moving money by stablecoin costs a fraction of a bank transfer. The World Bank puts the global average cost of sending money across a border at 6.36%.<\/li>\n<li>There are four types of stablecoins: fiat-backed (USDC), crypto-collateralized (DAI), commodity-backed (gold tokens), and algorithmic, the model that failed in 2022. You can <a href=\"https:\/\/paybis.com\/buy-usd-coin\/\">buy USDC<\/a> on Paybis with a card or a bank transfer.<\/li>\n<li>B2B stablecoin payments <a href=\"https:\/\/paybis.com\/blog\/b2b-stablecoin-payments\/?utm_source=chatgpt.com\">grew 733%<\/a> year over year in 2025, reaching about $226 billion.<\/li>\n<li>On Paybis, stablecoins now make up 86% of all crypto volume on the platform.<\/li>\n<\/ul>\n<p><!-- notionvc: 89377a1d-1626-4dfe-a6c6-40c869ee6203 --><\/p>\n    <\/div>\r<\/div>\n\n\n<p class=\"wp-block-paragraph\"><em>Crypto assets can increase or decrease in value. Paybis is a payment gateway, not an investment service. This content is for informational purposes only and does not constitute financial advice.<\/em><\/p>\n\n\n\n\n<div class=\"text-bg-color-border\" id=\"block_9ebf9b10c8248c4cfaa32c697b18e3eb\">\r    <div class=\"text-bg-color-border__content\">\r        <p><span class=\"notion-enable-hover\" data-token-index=\"0\" data-notion-highlight=\"teal\"><strong>Quick Answer<\/strong>: A stablecoin is a digital asset pegged to a stable currency, usually the US dollar, so one coin is built to stay worth one dollar. Fiat-backed coins such as USDC hold reserves of cash and short-term government debt against every coin in circulation. Large holders can swap coins for dollars with the issuer at any time, which is what holds the peg. Transfers settle in seconds to minutes. The EU regulates stablecoins under MiCA, and the US passed the GENIUS Act in July 2025. Paybis is MiCA-authorized and supports 90+ cryptocurrencies across 180+ countries.<\/span><!-- notionvc: 2583da2c-ccaf-458f-9d24-51fb537faf0b --><\/p>\n    <\/div>\r<\/div>\n\n\n<p class=\"wp-block-paragraph\">Crypto has a reputation for volatility, and most of it is earned. Bitcoin can move <a href=\"https:\/\/paybis.com\/blog\/why-is-bitcoin-dropping\/\">double digits in a week<\/a>, and headlines fill with charts pointing the wrong way.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The surprising part is that the fastest-growing thing in crypto right now is the part designed never to move at all.<\/p>\n\n\n\n<style>\n#pb-sta-qualify358 { all: revert; display:block !important; width:100% !important; max-width:100% !important; margin:26px 0 !important; font-family:'Graphik','Inter','Segoe UI',sans-serif !important; box-sizing:border-box !important; }\n#pb-sta-qualify358 *, #pb-sta-qualify358 *::before, #pb-sta-qualify358 *::after { box-sizing:border-box !important; }\n#pb-sta-qualify358 .cro-frame { display:block !important; width:100% !important; padding:1px !important; background:#E2E4F3 !important; border-radius:14px !important; box-shadow:0 6px 32px rgba(9,11,28,0.1) !important; overflow:hidden !important; }\n#pb-sta-qualify358 .cro-panel { display:block !important; width:100% !important; border-radius:13px !important; background:#FFFFFF !important; }\n#pb-sta-qualify358 .cro-head { display:block !important; background:#090B1C !important; padding:14px 20px !important; }\n#pb-sta-qualify358 .cro-eyebrow { display:inline-block !important; color:#A4A7E3 !important; font-family:inherit !important; font-size:12px !important; font-weight:700 !important; line-height:1.5 !important; letter-spacing:0.06em !important; text-transform:uppercase !important; }\n#pb-sta-qualify358 .cro-body { display:block !important; padding:20px !important; }\n#pb-sta-qualify358 .cro-body p { margin:0 0 14px !important; font-size:14px !important; font-weight:400 !important; line-height:1.6 !important; color:#090B1C !important; }\n#pb-sta-qualify358 .cro-body p:last-child { margin-bottom:0 !important; }\n#pb-sta-qualify358 .cro-actions { display:flex !important; flex-wrap:wrap !important; gap:10px !important; margin-top:4px !important; }\n#pb-sta-qualify358 .cro-btn { display:inline-block !important; background:#090B1C !important; color:#FFFFFF !important; text-decoration:none !important; font-family:inherit !important; font-size:14px !important; font-weight:700 !important; padding:10px 20px !important; border-radius:120px !important; text-align:center !important; border:1.5px solid #090B1C !important; }\n#pb-sta-qualify358 .cro-btn:hover { background:#1C2040 !important; border-color:#1C2040 !important; }\n#pb-sta-qualify358 .cro-btn.cro-btn-ghost { background:transparent !important; color:#090B1C !important; }\n#pb-sta-qualify358 .cro-btn.cro-btn-ghost:hover { background:#090B1C !important; color:#FFFFFF !important; }\n@media (max-width: 600px) {\n  #pb-sta-qualify358 .cro-head { padding:12px 16px !important; }\n  #pb-sta-qualify358 .cro-body { padding:16px !important; }\n}\n<\/style>\n\n<div id=\"pb-sta-qualify358\">\n  <div class=\"cro-frame\">\n    <div class=\"cro-panel\">\n      <div class=\"cro-head\">\n        <span class=\"cro-eyebrow\">Who this is for<\/span>\n      <\/div>\n      <div class=\"cro-body\">\n        <p>This covers what stablecoins are, the four backing models, and how the dollar peg holds. If you already know you want the simplest, most liquid dollar-pegged coin for payments or holding, buy USDC below.<\/p>\n        <div class=\"cro-actions\">\n          <a class=\"cro-btn\" href=\"https:\/\/paybis.com\/buy-usd-coin\/\">Buy USDC<\/a>\n        <\/div>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What Is a Stablecoin?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A stablecoin is a digital asset pegged to a stable currency, usually the US dollar. <a href=\"https:\/\/paybis.com\/buy-usd-coin\/\">One USDC<\/a> is built to stay at one dollar. Not approximately one dollar. Exactly one dollar, whatever Bitcoin is doing, whatever the market is doing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That peg is maintained through reserves. For every USDC in circulation, there is a real dollar held in reserve backing it. So you are not betting on price movement, but actually holding a digital version of money you already understand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How is that different from just holding dollars?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A stablecoin is a digital asset pegged to a stable currency, usually the US dollar. One USDC is built to stay at one dollar. Not approximately one dollar. Exactly one dollar, whatever Bitcoin is doing, whatever the market is doing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That peg is maintained through reserves. For every USDC in circulation, there is a real dollar held in reserve backing it. So you are not betting on price movement, but actually holding a digital version of money you already understand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most stablecoins track the US dollar. Euro-pegged coins like EURC work the same way against the euro.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The Four Types of Stablecoins<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Not all stablecoins hold their peg the same way. The backing model is the most important thing to understand about any coin you hold.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Fiat-backed (the standard). The issuer holds reserves of fiat money (traditional government currency such as dollars) and short-term government debt against the coins in circulation. USDC is the main example, and this is the model regulators have written rules for.<\/li>\n\n\n\n<li>Crypto-collateralized. Backed by other cryptocurrencies locked in smart contracts (code that holds and releases funds automatically). The collateral is worth more than the coins issued, so the peg survives a drop in crypto prices. DAI is the main example. No company holds the reserves. Code and governance token holders run the system.<\/li>\n\n\n\n<li>Commodity-backed. Pegged to a physical asset, usually gold, where each token represents a claim on metal held in a vault. A niche category for people who want gold exposure that moves like a token.<\/li>\n\n\n\n<li>Algorithmic. No hard reserves. The peg is held by supply mechanics alone. This is the model that failed when TerraUSD collapsed in 2022, and the market has largely abandoned it. If a coin advertises a peg with no reserves behind it, that history is the reason to be careful.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How Do Stablecoins Stay at $1?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Three mechanisms hold the peg.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reserves. For fiat-backed coins, every token is matched by a dollar of cash or short-term government debt held by the issuer.<\/li>\n\n\n\n<li>Minting and redemption. Large holders can create new coins by depositing dollars with the issuer, and they can redeem coins for dollars. That link to real money anchors the price.<\/li>\n\n\n\n<li>Arbitrage. If the market price slips to $0.99, traders buy the coin and redeem it for $1.00. That buying pressure closes the gap, usually within minutes.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The proof layer is attestations, which are third-party reports confirming the reserves exist. <a href=\"https:\/\/www.circle.com\/transparency\">Circle<\/a> publishes monthly attestations on USDC, examined by a Big Four accounting firm. When that proof is missing or stale, the peg depends on trust alone, and trust is what fails in a depeg. The full depeg history is covered in the Paybis <a href=\"https:\/\/paybis.com\/blog\/most-popular-stablecoins\/\">stablecoin rankings guide<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Is That Different From Just Holding Dollars?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Holding dollars in a bank account is familiar, but moving them internationally is slow and expensive. A bank wire takes 2 to 5 business days. Sending $200 across a border costs 6.36% of the amount on average, according to the World Bank&#8217;s <a href=\"https:\/\/remittanceprices.worldbank.org\/\">Remittance Prices Worldwide<\/a> report for Q3 2025. Correspondent bank fees and the exchange rate markup are where most of that sits, and neither shows on the receipt.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A stablecoin transfer settles in seconds to minutes and works the same whether you are sending money across the street or across the world. The recipient gets it fast. You know exactly what it costs. There are no surprises two days later.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Are Stablecoins Growing So Fast?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Because they solve a real problem that a lot of people have. B2B stablecoin payments reached about $226 billion in 2025 and grew 733% year over year, according to McKinsey&#8217;s analysis of <a href=\"https:\/\/www.mckinsey.com\/industries\/financial-services\/our-insights\/stablecoins-in-payments-what-the-raw-transaction-numbers-miss\">Artemis Analytics data<\/a>. Businesses drove that growth. They use stablecoins to move money across borders faster and cheaper than a wire transfer allows.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On Paybis, stablecoins now make up 86% of all crypto volume on the platform. The calmest asset in crypto turned out to be the one people use most.<\/p>\n\n\n\n<!-- Compact CTA Banner for Stablecoin Articles -->\n<style>\n.crypto-cta-banner {\n    margin: 40px auto !important;\n    font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, 'Helvetica Neue', Arial, sans-serif !important;\n    clear: both !important;\n    max-width: 100% !important;\n    position: relative !important;\n}\n\n.crypto-cta-banner .crypto-cta-link {\n    display: block !important;\n    background: linear-gradient(135deg, #1a1a1a 0%, #2d2d2d 100%) !important;\n    padding: 28px 32px !important;\n    border: 3px solid #667eea !important;\n    transition: all 0.3s ease !important;\n    cursor: pointer !important;\n    text-decoration: none !important;\n    box-sizing: border-box !important;\n}\n\n.crypto-cta-banner .crypto-cta-link:hover {\n    transform: translateY(-3px) !important;\n    box-shadow: 0 10px 25px rgba(102, 126, 234, 0.4) !important;\n    border-color: #764ba2 !important;\n    text-decoration: none !important;\n}\n\n.crypto-cta-banner .crypto-cta-content {\n    display: flex !important;\n    flex-direction: column !important;\n    gap: 20px !important;\n    align-items: center !important;\n}\n\n.crypto-cta-banner .crypto-cta-text {\n    color: white !important;\n    text-align: center !important;\n    max-width: 700px !important;\n}\n\n.crypto-cta-banner .crypto-cta-headline {\n    font-size: 22px !important;\n    font-weight: 700 !important;\n    margin: 0 0 8px 0 !important;\n    padding: 0 !important;\n    color: white !important;\n    line-height: 1.3 !important;\n}\n\n.crypto-cta-banner .crypto-cta-subtext {\n    font-size: 14px !important;\n    margin: 0 !important;\n    padding: 0 !important;\n    color: rgba(255, 255, 255, 0.85) !important;\n    line-height: 1.5 !important;\n}\n\n.crypto-cta-banner .crypto-cta-action {\n    width: 100% !important;\n    display: flex !important;\n    justify-content: center !important;\n}\n\n.crypto-cta-banner .crypto-buy-button {\n    background: linear-gradient(135deg, #667eea 0%, #764ba2 100%) !important;\n    color: white !important;\n    border: none !important;\n    padding: 14px 40px !important;\n    font-size: 16px !important;\n    font-weight: 700 !important;\n    cursor: pointer !important;\n    transition: all 0.3s ease !important;\n    white-space: nowrap !important;\n    box-shadow: 0 4px 15px rgba(102, 126, 234, 0.3) !important;\n    text-decoration: none !important;\n    display: inline-block !important;\n    text-align: center !important;\n}\n\n.crypto-cta-banner .crypto-buy-button:hover {\n    transform: scale(1.05) !important;\n    box-shadow: 0 6px 20px rgba(102, 126, 234, 0.5) !important;\n    text-decoration: none !important;\n}\n\n\/* Mobile Responsive *\/\n@media (max-width: 768px) {\n    .crypto-cta-banner .crypto-cta-link {\n        padding: 24px 20px !important;\n    }\n    \n    .crypto-cta-banner .crypto-cta-content {\n        gap: 18px !important;\n    }\n    \n    .crypto-cta-banner .crypto-cta-headline {\n        font-size: 19px !important;\n    }\n    \n    .crypto-cta-banner .crypto-cta-subtext {\n        font-size: 13px !important;\n    }\n    \n    .crypto-cta-banner .crypto-buy-button {\n        padding: 13px 36px !important;\n        font-size: 15px !important;\n    }\n}\n\n@media (max-width: 480px) {\n    .crypto-cta-banner .crypto-cta-link {\n        padding: 20px 16px !important;\n    }\n    \n    .crypto-cta-banner .crypto-cta-headline {\n        font-size: 17px !important;\n    }\n    \n    .crypto-cta-banner .crypto-cta-subtext {\n        font-size: 12px !important;\n    }\n    \n    .crypto-cta-banner .crypto-buy-button {\n        width: 85% !important;\n        padding: 12px 28px !important;\n        font-size: 14px !important;\n    }\n}\n<\/style>\n\n<div class=\"crypto-cta-banner\">\n    <a href=\"https:\/\/paybis.com\/buy-usd-coin\/\" target=\"_blank\" class=\"crypto-cta-link\">\n        <div class=\"crypto-cta-content\">\n            <div class=\"crypto-cta-text\">\n                <h3 class=\"crypto-cta-headline\">Move money in seconds. No surprises.<\/h3>\n                <p class=\"crypto-cta-subtext\">Buy USDC on a platform licensed by the Bank of Latvia. Every fee shows before you confirm.<\/p>\n            <\/div>\n            \n            <div class=\"crypto-cta-action\">\n                <button class=\"crypto-buy-button\">\n                    Buy Stablecoins with Paybis \u2192\n                <\/button>\n            <\/div>\n        <\/div>\n    <\/a>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Which Stablecoins Should You Know?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">USDC is the largest regulated stablecoin, according to <a href=\"https:\/\/www.circle.com\/usdc\">Circle<\/a>, which issues it. It holds its reserves in cash and short-term US Treasuries, and a Big Four accounting firm examines a monthly attestation of those reserves. Every dollar of USDC in circulation is matched by a dollar held in reserve.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also the most practical option for most people. USDC is accepted across virtually every major crypto platform, settles in seconds, and is the default choice for businesses that need a compliant stablecoin for payments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.circle.com\/eurc\">EURC<\/a> is the euro version, also issued by Circle. It works the same way against the euro rather than the dollar.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DAI is the main decentralized option. It is backed by crypto collateral rather than an issuer&#8217;s bank account, and it is used mostly inside DeFi (apps that run on blockchains instead of through a company).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For the full ranked list with market caps and backing models, see the Paybis guide to the <a href=\"https:\/\/paybis.com\/blog\/most-popular-stablecoins\/\">top stablecoins<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Does It Cost to Buy or Send a Stablecoin?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Less than most people expect. Sending a stablecoin costs a network fee, which is fractions of a cent on networks like Solana and Polygon and around a dollar or two on TRON. On top of that sits whatever the platform charges to convert in and out of regular currency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On Paybis, every fee shows up before you confirm. You see exactly what you are paying before a single dollar moves. The breakdown lists the service fee and the network fee separately, and no charge is added after you confirm.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Does Holding a Stablecoin Carry Risk?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">By holding a stablecoin, you consider fewer risks than other crypto assets. But it&#8217;s still not zero. The main risk is whether the issuer actually holds the reserves it claims. For USDC, Circle publishes monthly attestations and operates under US financial regulation. That makes it one of the most transparent options available.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The stress case is a depeg, which is the coin trading away from its $1 target. Reserve-backed coins with reachable assets have historically recovered within days. Coins without hard reserves have collapsed. The backing model from the types section above is what decides which way it goes.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The platform you use matters just as much as the asset itself. Paybis is licensed by the <a href=\"https:\/\/www.bank.lv\/en\/financial-market-participant-register\/market-participants\/paybis-europe-sia\">Bank of Latvia<\/a> under MiCA, the EU&#8217;s crypto regulatory framework. That means client funds are held by a regulated entity that answers to a financial authority, not an unlicensed exchange with no accountability to anyone.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/paybis.com\/blog\/glossary\/volatility\/\">Price volatility<\/a> is not the risk here. That is the point of the peg.<\/p>\n\n\n\n<style>\n#pb-sta-objection359 { all: revert; display:block !important; width:100% !important; max-width:100% !important; margin:26px 0 !important; font-family:'Graphik','Inter','Segoe UI',sans-serif !important; box-sizing:border-box !important; }\n#pb-sta-objection359 *, #pb-sta-objection359 *::before, #pb-sta-objection359 *::after { box-sizing:border-box !important; }\n#pb-sta-objection359 .cro-frame { display:block !important; width:100% !important; padding:1px !important; background:#E2E4F3 !important; border-radius:14px !important; box-shadow:0 6px 32px rgba(9,11,28,0.1) !important; overflow:hidden !important; }\n#pb-sta-objection359 .cro-panel { display:block !important; width:100% !important; border-radius:13px !important; background:#FFFFFF !important; }\n#pb-sta-objection359 .cro-head { display:block !important; background:#090B1C !important; padding:14px 20px !important; }\n#pb-sta-objection359 .cro-eyebrow { display:inline-block !important; color:#A4A7E3 !important; font-family:inherit !important; font-size:12px !important; font-weight:700 !important; line-height:1.5 !important; letter-spacing:0.06em !important; text-transform:uppercase !important; }\n#pb-sta-objection359 .cro-row { display:block !important; padding:16px 20px !important; border-bottom:1px solid #E2E4F3 !important; background:#FFFFFF !important; }\n#pb-sta-objection359 .cro-row:nth-child(even) { background:#F4F5FF !important; }\n#pb-sta-objection359 .cro-row:last-child { border-bottom:0 !important; }\n#pb-sta-objection359 .cro-row-title { margin:0 0 4px !important; font-size:14px !important; font-weight:700 !important; color:#090B1C !important; line-height:1.5 !important; }\n#pb-sta-objection359 .cro-row-text { margin:0 !important; font-size:14px !important; font-weight:400 !important; color:#090B1C !important; line-height:1.6 !important; }\n#pb-sta-objection359 .cro-row-text a { color:#090B1C !important; font-weight:700 !important; text-decoration:underline !important; }\n@media (max-width: 600px) {\n  #pb-sta-objection359 .cro-head { padding:12px 16px !important; }\n  #pb-sta-objection359 .cro-row { padding:14px 16px !important; }\n}\n<\/style>\n\n<div id=\"pb-sta-objection359\">\n  <div class=\"cro-frame\">\n    <div class=\"cro-panel\">\n      <div class=\"cro-head\">\n        <span class=\"cro-eyebrow\">What usually goes wrong here<\/span>\n      <\/div>\n      <div class=\"cro-row\">\n        <p class=\"cro-row-title\">Assuming all stablecoins are backed the same way<\/p>\n        <p class=\"cro-row-text\">Fiat-backed coins like USDC hold cash and short-term government debt. Algorithmic coins rely on supply mechanics alone, the model that failed when TerraUSD collapsed in 2022. Check the backing model before you hold.<\/p>\n      <\/div>\n      <div class=\"cro-row\">\n        <p class=\"cro-row-title\">Treating the peg as a guarantee with no proof<\/p>\n        <p class=\"cro-row-text\">Reserves need verification. Circle publishes monthly attestations on USDC, examined by a Big Four accounting firm. If attestations are missing or stale, the peg depends on trust alone. See the <a href=\"https:\/\/paybis.com\/blog\/most-popular-stablecoins\/\">stablecoin rankings guide<\/a>.<\/p>\n      <\/div>\n      <div class=\"cro-row\">\n        <p class=\"cro-row-title\">Not checking which network before sending<\/p>\n        <p class=\"cro-row-text\">The network fee varies hugely: fractions of a cent on Solana or Polygon, around a dollar or two on TRON. Confirm the network before you send.<\/p>\n      <\/div>\n      <div class=\"cro-row\">\n        <p class=\"cro-row-title\">Assuming a stablecoin is completely risk-free<\/p>\n        <p class=\"cro-row-text\">Price volatility is not the risk here, a depeg is. Reserve-backed coins have historically recovered within days; coins without hard reserves have collapsed.<\/p>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">How Are Stablecoins Regulated?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Stablecoins moved from unregulated to regulated in most major markets between 2023 and 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the EU, the MiCA framework treats stablecoins as e-money tokens, which is its legal category for coins pegged to a currency. Issuers need authorization, full reserve backing, and redemption rights. Platforms that handle them need a crypto-asset service provider licence. Latvijas Banka authorized SIA Paybis Europe as a crypto-asset service provider (licence 27-55\/2026\/6) and as a payment institution (licence 27-55\/2026\/7) on 12 May 2026, the first company in Latvia to receive both at once. That is what covers regulated stablecoin services across all 27 EU states.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the US, the <a href=\"https:\/\/www.congress.gov\/crs-product\/IN12553\">GENIUS Act<\/a> was signed into law in July 2025. It requires dollar stablecoin issuers to be approved by a state or federal regulator, to hold at least one dollar of permitted reserves for every coin issued, to publish their reserve composition every month, and to run anti-money-laundering programs. Most of the law takes effect in January 2027, 18 months after it was signed, whether or not regulators have finished the implementing rules.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The practical effect for users is simple. Major fiat-backed coins now operate under rules that did not exist when stablecoins earned their early reputation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Are Stablecoins Used For?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Four uses account for most stablecoin volume.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Trading. Holding value between trades without cashing out to a bank. This is why stablecoins are the pricing currency for most crypto pairs.<\/li>\n\n\n\n<li>Cross-border payments and remittances. Settling in minutes instead of days through correspondent banks.<\/li>\n\n\n\n<li>Holding dollars outside a local currency. People in countries where the local currency moves fast hold a dollar-pegged coin instead.<\/li>\n\n\n\n<li>Business settlement. Companies accepting crypto payments that convert straight to regular currency, and platforms running payouts over stablecoin rails. Paybis <a href=\"https:\/\/paybis.com\/business\/payment-processing\/\">payment processing<\/a> covers the first and <a href=\"https:\/\/paybis.com\/business\/paybis-send\/\">Mass Crypto Payouts<\/a> covers the second.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">More people than most expect, and for practical reasons. Businesses use them to move money across borders faster and cheaper than a wire allows. Individuals use them to send money abroad or hold savings outside a volatile local currency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The 733% growth figure is not coming from crypto enthusiasts. It is coming from finance teams who needed a faster, cheaper way to move money and found one.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Bottom Line<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Stablecoins might not be the exciting part of crypto. They are not designed to go up. What they do is move money fast and cheaply, and that turns out to be something a lot of people actually need.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you have never held one, the mechanics are simple. <a href=\"https:\/\/paybis.com\/buy-usd-coin\/\">Buy USDC on Paybis<\/a>, and every fee shows up before you confirm. If something comes up, a real person from the support team answers, even at two in the morning.<\/p>\n\n\n\n<style>\n#pb-sta-router360 { all: revert; display:block !important; width:100% !important; max-width:100% !important; margin:26px 0 !important; font-family:'Graphik','Inter','Segoe UI',sans-serif !important; box-sizing:border-box !important; }\n#pb-sta-router360 *, #pb-sta-router360 *::before, #pb-sta-router360 *::after { box-sizing:border-box !important; }\n#pb-sta-router360 .cro-frame { display:block !important; width:100% !important; padding:1px !important; background:#E2E4F3 !important; border-radius:14px !important; box-shadow:0 6px 32px rgba(9,11,28,0.1) !important; overflow:hidden !important; }\n#pb-sta-router360 .cro-panel { display:block !important; width:100% !important; border-radius:13px !important; background:#FFFFFF !important; }\n#pb-sta-router360 .cro-head { display:block !important; background:#090B1C !important; padding:14px 20px !important; }\n#pb-sta-router360 .cro-eyebrow { display:inline-block !important; color:#A4A7E3 !important; font-family:inherit !important; font-size:12px !important; font-weight:700 !important; line-height:1.5 !important; letter-spacing:0.06em !important; text-transform:uppercase !important; }\n#pb-sta-router360 .cro-body { display:block !important; padding:20px !important; }\n#pb-sta-router360 .cro-branches { display:flex !important; flex-wrap:wrap !important; gap:12px !important; margin-bottom:16px !important; }\n#pb-sta-router360 .cro-branch { flex:1 1 180px !important; display:flex !important; flex-direction:column !important; align-items:stretch !important; padding:16px !important; border:1px solid #E2E4F3 !important; border-radius:10px !important; background:#F4F5FF !important; }\n#pb-sta-router360 .cro-if { display:block !important; margin:0 0 6px !important; font-size:11px !important; font-weight:700 !important; letter-spacing:0.05em !important; text-transform:uppercase !important; color:rgba(9,11,28,0.55) !important; }\n#pb-sta-router360 .cro-branch p { margin:0 0 14px !important; font-size:14px !important; font-weight:400 !important; color:#090B1C !important; line-height:1.6 !important; flex:1 0 auto !important; }\n#pb-sta-router360 .cro-branch p:last-of-type { margin-bottom:14px !important; }\n#pb-sta-router360 .cro-btn { display:inline-block !important; background:#090B1C !important; color:#FFFFFF !important; text-decoration:none !important; font-family:inherit !important; font-size:14px !important; font-weight:700 !important; padding:10px 20px !important; border-radius:120px !important; text-align:center !important; border:1.5px solid #090B1C !important; }\n#pb-sta-router360 .cro-btn:hover { background:#1C2040 !important; border-color:#1C2040 !important; }\n#pb-sta-router360 .cro-btn.cro-btn-ghost { background:transparent !important; color:#090B1C !important; }\n#pb-sta-router360 .cro-btn.cro-btn-ghost:hover { background:#090B1C !important; color:#FFFFFF !important; }\n#pb-sta-router360 .cro-branch .cro-btn { margin-top:auto !important; width:100% !important; }\n#pb-sta-router360 .cro-note { margin:4px 0 0 !important; font-size:12px !important; color:rgba(9,11,28,0.55) !important; line-height:1.4 !important; }\n@media (max-width: 600px) {\n  #pb-sta-router360 .cro-head { padding:12px 16px !important; }\n  #pb-sta-router360 .cro-body { padding:16px !important; }\n  #pb-sta-router360 .cro-branches { flex-direction:column !important; }\n}\n<\/style>\n\n<div id=\"pb-sta-router360\">\n  <div class=\"cro-frame\">\n    <div class=\"cro-panel\">\n      <div class=\"cro-head\">\n        <span class=\"cro-eyebrow\">Choose your next step<\/span>\n      <\/div>\n      <div class=\"cro-body\">\n        <div class=\"cro-branches\">\n          <div class=\"cro-branch\">\n            <span class=\"cro-if\">Choose this if<\/span>\n            <p>You want the simplest, most liquid dollar-pegged coin for payments or holding.<\/p>\n        <a class=\"cro-btn\" href=\"https:\/\/paybis.com\/buy-usd-coin\/\">Get USDC at today&#8217;s rate<\/a>\n          <\/div>\n          <div class=\"cro-branch\">\n            <span class=\"cro-if\">Choose this if<\/span>\n            <p>You want to compare stablecoins by market cap and backing model first.<\/p>\n        <a class=\"cro-btn cro-btn-ghost\" href=\"https:\/\/paybis.com\/blog\/most-popular-stablecoins\/\">See the stablecoin rankings guide<\/a>\n          <\/div>\n        <\/div>\n        <p class=\"cro-note\">Crypto assets can increase or decrease in value. Paybis is a payment gateway, not an investment service. This content is for informational purposes only and does not constitute financial advice.<\/p>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Key Terminology<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/paybis.com\/blog\/glossary\/pegged-currency\/\"><strong>Peg<\/strong><\/a>: the fixed value a stablecoin tracks, usually $1.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Reserves:<\/strong> the real assets an issuer holds to back the coins in circulation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Attestation:<\/strong> a third-party report confirming the reserves exist.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"https:\/\/paybis.com\/blog\/glossary\/minting\/\">Minting<\/a> and redemption<\/strong>: creating coins by depositing dollars, or exchanging coins back for dollars, the mechanism that anchors the peg.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/paybis.com\/blog\/glossary\/depeg\/\"><strong>Depeg<\/strong><\/a>: the coin trading away from its target value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>E-money token:<\/strong> MiCA&#8217;s legal category for fiat-pegged stablecoins in the EU.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crypto assets can increase or decrease in value. Paybis is a payment gateway, not an investment service. This content is for informational purposes only and does not constitute financial advice. Crypto has a reputation for volatility, and most of it is earned. Bitcoin can move double digits in a week, and headlines fill with charts [&hellip;]<\/p>\n","protected":false},"author":38,"featured_media":10055,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[8,132,195,196],"tags":[199,201,204,217,223,254],"businesses_tag":[],"class_list":["post-10054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-educational-guides","category-individuals","category-security-privacy","category-law","tag-education","tag-security","tag-analysis","tag-privacy","tag-transactions","tag-trending"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Are Stablecoins and How Do They Work? 2026 Guide<\/title>\n<meta name=\"description\" content=\"What stablecoins are, how the dollar peg works, the four types with examples, what they cost to use, their risks, and how they are regulated in 2026.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/paybis.com\/blog\/what-are-stablecoins-and-how-do-they-work\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Are Stablecoins and How Do They Work? 2026 Guide\" \/>\n<meta property=\"og:description\" content=\"What stablecoins are, how the dollar peg works, the four types with examples, what they cost to use, their risks, and how they are regulated in 2026.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/paybis.com\/blog\/what-are-stablecoins-and-how-do-they-work\/\" \/>\n<meta property=\"og:site_name\" content=\"Paybis Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Paybis\/\" \/>\n<meta property=\"article:published_time\" content=\"2026-06-09T10:16:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-10-29T08:08:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/paybis.com\/blog\/wp-content\/uploads\/2026\/06\/Stablecoins.webp\" \/>\n\t<meta property=\"og:image:width\" content=\"1672\" \/>\n\t<meta property=\"og:image:height\" content=\"941\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/webp\" \/>\n<meta name=\"author\" content=\"Paul Afshar\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@paybis_com\" \/>\n<meta name=\"twitter:site\" content=\"@paybis_com\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Paul Afshar\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"10 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/\"},\"author\":{\"name\":\"Paul Afshar\",\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/#\\\/schema\\\/person\\\/51eb9f911c9794588742e210bf3bdb7f\"},\"headline\":\"What Are Stablecoins and How Do They Work?\",\"datePublished\":\"2026-06-09T10:16:11+00:00\",\"dateModified\":\"2026-10-29T08:08:38+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/\"},\"wordCount\":2068,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/paybis.com\\\/blog\\\/wp-content\\\/uploads\\\/2026\\\/06\\\/Stablecoins.webp\",\"keywords\":[\"Education\",\"Security\",\"Analysis\",\"Privacy\",\"Transactions\",\"Trending\"],\"articleSection\":[\"Educational guides\",\"Individuals\",\"Security &amp; Privacy\",\"Law, government, taxes\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/\",\"url\":\"https:\\\/\\\/paybis.com\\\/blog\\\/what-are-stablecoins-and-how-do-they-work\\\/\",\"name\":\"What Are Stablecoins and How Do They Work? 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