To Brazil, have proposed frameworks for further development and implementation. These approaches have variously emphasized rules for capitalization, liquidity, custody, redemption, disclosure, consumer protection, and AML/CFT. Critics worry that stablecoins could even pose a threat to the financial system. “In most instances, we have no visibility to any stablecoins, no public audits, no examinations, no inspections — who knows what is really going on?,” Reed Stark says. New York’s attorney general investigated Tether and crypto exchange Bifinex, accusing the two companies of not maintaining proper one-to-one reserves. The companies denied that, but the case was settled in 2021 with a $18.5 million fine, with the two crypto firms agreeing to be more transparent about their reserves.
Building upon the Worldline Digital Currency, Worldline’s stablecoin solution leverages Worldline Wallet with key capabilities to allow seamless payment and transactions through digital currencies of your choice. Despite the fact that stablecoins may be less volatile than other forms of crypto, they are still using newer technology which may have unknown bugs or vulnerabilities. And there’s always a chance that you could lose the private keys that give you access to your cryptocurrency, either through a hack or user error. Precious metal-backed stablecoins use gold and other precious metals to help maintain their value. These stablecoins are centralized, which parts of the crypto community may see as a drawback, but it also protects them from crypto volatility. Gold has long been seen as a hedge against stock market volatility and inflation, making it an attractive addition to portfolios in fluctuating markets.
Zero Volatility Risk
This will have profound implications for the way we make payments and transfer value. Stablecoins could pave the way towards a more democratic, decentralised, and efficient financial ecosystem. In short, many of the stablecoins that have been around for years (like DAI) likely won’t be considered legal “means of payment or settlement.” But their exact status isn’t entirely clear, either. Stablecoins are a type of Bitcoin alternative (altcoin) that is built to offer more stability than other cryptos. Some are actually backed by a reserve of the asset they represent; others use algorithms or other methods to keep their values from fluctuating too much. Keep in mind, not all stablecoins are supported by all digital wallets, exchanges or on and off-ramps.
How are stablecoins used?
This functionality is particularly relevant in markets where traditional payment infrastructure is limited. One of the biggest fears is that they will suffer the equivalent of a run on the bank, like Silicon Valley Bank which collapsed in 2023. A similar scenario could play out if customers rush en masse to cash in their stablecoins — and the issuers find themselves unable to pay back customers. John Reed Stark, a former top financial regulator who served as chief of the SEC Office of Internet Enforcement, is a prominent critic of cryptocurrencies.
Launch and scale a compliant crypto top-up feature without complications.
- No single intermediary is required for two parties to transact in crypto assets.
- The Maker Protocol is an open-source project created in 2014 as a decentralized answer to controversial centralized stablecoin protocols.
- Every new stablecoin issued typically corresponds to demand for U.S. treasuries or cash equivalents.
- One point of controversy in this legislation is whether and how to restrict the ability of the president and other federal politicians from issuing stablecoins of their own.
Millionaires tend to spread their money across multiple places to achieve a balance of safety, growth, and liquidity. If you need to improve your credit scores fast, you might be hoping for overnight results. Here’s how to boost your scores https://youtu.be/8FE2DtFZhTs?si=5wa4OvXjw7shwWCf by 100 points, and how long it really takes. Fully control your payment flows with API integration and our no code tools. This month, JPMorgan analysts estimated the market could grow “two to three times” that size over the “next couple of years.” Earlier this year, a Citigroup report forecast growth of between $1.6 trillion and $3.7 trillion by 2030.
All cryptocurrencies are are based on similar blockchain technology, which enables secure ownership of digital assets. Cryptocurrencies circulate on decentralized networks that use cryptography to guard against counterfeiting and fraud. In the crypto economy, where transactions occur on a decentralized blockchain, digitized fiat cash—which is not a decentralized asset—may not be recognizable within the network. You need a cryptocurrency to facilitate transactions, but one that has the price stability of cash.
Its correlation with global money supply is well documented, and the price tends to move higher the more central banks print. Card networks typically take around 10 points per transaction as an assessment fee, while the bulk of interchange fees flow to issuing banks. If stablecoins can bypass the banking layer while still leveraging existing networks as a last-mile link to consumers, disruption could evolve into collaboration. One of stablecoins’ key advantages is their ability to bypass traditional intermediaries. Rather than routing payments through banks, card networks, or correspondent systems, they enable direct wallet-to-wallet transfers on the blockchain. However, despite this technical edge, breaking into mainstream consumer payments remains a steep climb.
Traditional treasury operations are fragmented, slow, and manually intensive. Stablecoins enable businesses to move liquidity instantly across accounts and geographies, making 24/7 liquidity management possible. Circle International Bermuda Limited is licensed to conduct digital asset business by the Bermuda Monetary Authority.
The U.S. has no federal regulatory framework for stablecoins, although Congress is currently working on one, with the GENIUS Act passing the Senate on June 17, 2025, and the STABLE Act pending in the House. One point of controversy in this legislation is whether and how to restrict the ability of the president and other federal politicians from issuing stablecoins of their own. If you’ve ever sent funds to loved ones in another country, you’re no doubt familiar with the pain points of making international transfers and cross-border payments. The World Bank estimates that remittances cost the sender about 6.62% of each transfer, which amounts to about $31 of a $500 transfer. International wire transfers can also take anywhere from one to five days to complete.