What Is a Stablecoin?

Crypto is known for volatility — prices can swing wildly in minutes. But not all crypto assets behave this way. Some are built to stay stable. These are called stablecoins.

In this article, you’ll learn what stablecoins are, how they work, and why they play a vital role in the crypto economy.

What is a stablecoin?

A stablecoin is a cryptocurrency that’s designed to maintain a stable value — usually pegged to a fiat currency like the US dollar or euro. 1 stablecoin = 1 unit of the reference currency.

This makes stablecoins useful for payments, trading, saving, and avoiding volatility.

Types of stablecoins

Fiat-backed: Backed 1:1 by reserves held in traditional currency (e.g. USDC, EURC)
Crypto-backed: Backed by other cryptocurrencies (e.g. DAI, overcollateralized)
Algorithmic: Maintains value using supply-and-demand rules (higher risk)

Benefits of stablecoins

Stability: Reduces exposure to price swings
Speed: Faster and cheaper than traditional bank transfers
Accessibility: 24/7 availability without banks or borders
Programmability: Can be integrated into smart contracts and dApps

Risks and considerations

Stablecoins depend on the trustworthiness of the issuer or collateral
Not all are fully backed or transparent
Some regulators are pushing for tighter controls and disclosure rules

Examples of stablecoins

USDC: USD-backed, issued by Circle, widely accepted and transparent
EURC: Euro-backed stablecoin, also issued by Circle

Stablecoin (EMT) Notice

Effective 2 March 2026, transfer services for stablecoins (EMTs) have been discontinued on Floin.
Deposits, withdrawals, and any sending or receiving to or from external wallets are not supported.
Stablecoins can only be acquired as part of an on-ramp transaction (exchange of fiat funds into crypto-assets) or disposed of as part of an off-ramp transaction (exchange of crypto-assets into fiat funds or other crypto-assets), in each case with Floin AG acting as the sole transaction counterparty.
EMTs are offered exclusively in connection with exchange services. Floin does not provide payment accounts or any other payment services in relation to EMTs.