Stablecoins: Why and How to Use Them in 2025?**
### Introduction
In an ecosystem as volatile as that of cryptocurrencies, stablecoins have established themselves as a buoy of stability. While the price of Bitcoin can vary by several percent in a few hours, a stablecoin like USDT remains, in principle, pegged to the dollar. But their role goes well beyond being a simple alternative to cash. They facilitate exchanges, boost DeFi, serve as a bridge to fiat currencies, and even begin to compete with traditional currencies in some countries.
So, why have these stable tokens become indispensable? And above all, how to use them wisely?
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## 1. What is a stablecoin?
A stablecoin is a cryptocurrency designed to maintain a stable value. Unlike most cryptos that fluctuate based on supply and demand, the stablecoin is backed by a stable asset: dollar, euro, gold, or even a basket of currencies. The goal? To replicate the stability of a fiat currency while retaining the advantages of blockchain.
The most well-known are:
- USDT (Tether): pegged to the US dollar.
- USDC (Circle): direct competitor, also dollar-based.
- DAI: decentralized stablecoin, backed by cryptos like ETH.
- EURC: euro equivalent of USDC.
- XAUt: stablecoin backed by gold.
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## 2. Why are stablecoins essential?
The explosive growth of stablecoins rests on several pillars:
### a. Protect against volatility
An investor can secure their gains without converting to fiat currency. In times of high uncertainty, migrating funds to a stablecoin is a common reflex.
### b. An essential trading tool
They allow for quick transitions from one asset to another without leaving the ecosystem. Buying volatile cryptos from stablecoins is often faster and cheaper than going through traditional currencies.
### c. Fast international transfer
Sending USDT to the other side of the world takes less time and often costs less than through the traditional banking system.
### d. Pillars of DeFi
In decentralized finance protocols, stablecoins are used as collateral for loans, in liquidity pools, or for farming.
### e. An alternative in crisis countries
In some countries like Argentina or Nigeria, where inflation erodes the national currency, many citizens turn to stablecoins to protect their purchasing power.
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## 3. The different types of stablecoins
### a. Collateralized in fiat currency
These stablecoins (USDT, USDC, EURC) are backed by equivalent reserves in real currencies held by centralized entities. The promise: 1 USDC = 1 USD, with reserves to prove it.
### b. Collateralized in cryptos
Example: DAI, from the MakerDAO protocol. It is backed by cryptos like ETH, often with over-collateralization (e.g., 150%). This system allows for more decentralization but depends on the proper functioning of the smart contract.
### c. Algorithmic
They maintain their value through market algorithms without real collateral. Examples: former UST (Terra Luna). Despite the innovation, these models have often collapsed under market pressure, making this category the riskiest.
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## 4. How to use a stablecoin?
### a. Create a wallet
A wallet like Trust Wallet, MetaMask, or Binance Wallet allows you to store, send, and receive stablecoins.
### b. Buying stablecoins
- On a centralized exchange like Binance or Bybit.
- On a DEX (decentralized exchange) like Uniswap or Curve.
- By pairing with other cryptos.
### c. Use in DeFi
- Staking: earn interest by locking up your stablecoins.
- Loans: borrowing or lending stablecoins via Aave or Compound.
- Yield farming: providing liquidity in exchange for returns.
### d. Payments
Some platforms and merchants already accept USDT or USDC as a means of payment.
### e. Personal transfers
Send funds to a relative abroad with lower fees than a bank transfer.
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## 5. The advantages of stablecoins
- Stability: no sudden price fluctuations.
- Accessibility: available 24/7, even without a bank account.
- Low fees: particularly on certain blockchains (Polygon, Tron).
- Interoperability: usable on many DeFi platforms.
- Financial freedom: especially in regions with high monetary instability.
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## 6. Risks and limitations
### a. Centralization
Stablecoin issuers can freeze accounts (documented cases with USDC and USDT), which goes against the crypto ideology.
### b. De-pegging risk
Some stablecoins temporarily lose their peg. A prolonged disconnection can be dramatic.
### c. Increasing regulation
Stablecoins are in the crosshairs of regulators. New laws may impact their accessibility or functioning.
### d. Lack of transparency
Some projects do not regularly publish their reserves or audits (notably Tether).
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## 7. Stablecoins and regulation
Governments are closely interested. The European Union, through the MiCA regulation, now regulates stablecoin issuers. In the United States, proposed laws aim to require strong guarantees.
The challenge is twofold: to protect users while retaining control over monetary policy.
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## 8. CBDC vs stablecoins: what are the differences?
- CBDCs are state-backed digital currencies. Centralized, traceable, often subject to usage conditions.
- Stablecoins, on the other hand, are private, sometimes decentralized, and often more flexible in use.
The coexistence of the two is expected to be delicate. Some see stablecoins as a healthy alternative, while others view them as a threat to control.
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## Conclusion
In just a few years, stablecoins have moved from technical curiosity to a central infrastructure of the cryptosphere. Simple, fast, and relatively safe, they offer a gateway to digital finance for millions of people.
But like any powerful tool, they must be used wisely. Between freedom and control, innovation and regulation, stablecoins outline the contours of a new economy where everyone can (finally) regain control of their money.