In the crypto universe, volatility is the norm. Bitcoin, Ethereum, and other cryptocurrencies can vary by 10% or more in a matter of hours.

But there is a specific group that does not face this type of problem: stablecoins, digital assets designed to maintain a stable value, usually linked to fiat currencies like the dollar or the euro.

In 2025, its role in the ecosystem is even more central: to protect capital, facilitate transactions, or serve as a basis for operations in DeFi. Stablecoins are the main topic of this article.

What are stablecoins

Stablecoins are cryptocurrencies whose price is linked to a reference asset, such as a national currency, commodities (like gold), or even baskets of assets. This parity reduces volatility and provides predictability to value.

They operate in different ways depending on their backing mechanism:

  • Backed by fiat currency (fiat-backed)
    Each token is supposedly guaranteed by equivalent reserves in dollars, euros, or another currency. E.g.: USDT, USDC.

  • Backed by crypto (crypto-collateralized)
    They maintain collateral in volatile cryptocurrencies, but with over-collateralization to withstand fluctuations. E.g.: DAI.

  • Algorithmic (algorithmic)
    They seek to maintain parity through algorithms that expand or contract supply, without direct backing. They are more experimental and risky. E.g.: USDe.

What are the benefits of stablecoins

Even in an environment of innovation and risk, stablecoins have become essential by offering clear advantages:

  • Protection against volatility
    In times of market downturn, it is possible to convert volatile crypto into stablecoin to preserve value without leaving the ecosystem.

  • Liquidity and agility
    Transactions with stablecoins are fast and cheap compared to traditional bank transfers, especially international ones.

  • Access to DeFi
    They are widely used in lending, staking, and yield farming protocols, functioning as a unit of account and collateral.

  • Gateway to crypto
    Many users start in the market by buying stablecoins to then exchange them for other assets.

  • Ease for arbitrage
    Traders use stablecoins to move capital quickly between exchanges and take advantage of price differences.

Main stablecoins of 2025 by market value

In 2025, the ranking of stablecoins reflects not only size but also trust and adoption:

  • Tether (USDT)
    Type: dollar-backed (fiat-backed)
    Strengths: global liquidity, almost universal acceptance
    Point to watch: debates about reserve transparency.

  • USD Coin (USDC)
    Type: dollar-backed (fiat-backed)
    Strengths: regular audits, good reputation among regulators
    Frequent use: DeFi and institutional transactions.

  • Dai (DAI)
    Type: crypto-backed (mainly ETH and other stablecoins)
    Strengths: decentralized, governed by the MakerDAO community
    Particularity: maintains parity with the dollar through over-collateralization.

  • Ethena USDe – synthetic stablecoin backed by hedging strategies with derivatives, designed to maintain parity with the dollar in a decentralized and censorship-resistant manner, with accelerated growth in 2025.

  • TrueUSD (TUSD) – audited backing and focus on transparency, but with lower volume compared to leaders.

Beyond exclusively crypto projects, new relevant players could emerge, especially stablecoins issued by central banks (CBDC), such as the Drex in Brazil, which could compete in domestic transactions.

In these cases, the idea is similar to that of other stablecoins, but the initiative comes from centralized sources: monetary authorities.

How to use stablecoins

Stablecoins are not just 'digital dollars': their use goes far beyond storing value.

  1. Trading and arbitrage
    They allow capital to be moved quickly between exchanges to take advantage of price opportunities without returning to fiat currency.

  2. Capital protection
    In sharp declines, converting volatile positions to stablecoins preserves purchasing power until the market recovers.

  3. Generating yield
    They can be deposited in DeFi protocols to earn interest, whether by lending or participating in liquidity pools.

  4. Payments and remittances
    International transactions with stablecoins are faster and cheaper than through the traditional banking system, especially in regions with high inflation or capital controls.

  5. On-ramp and off-ramp
    They facilitate entry and exit from the crypto market, functioning as an intermediary currency between digital and fiat assets.

Points to consider when using stablecoins

Despite their advantages, it is important to know the risks:

  • Counterparty risk: centralized stablecoins depend on issuers who must maintain real reserves.

  • Regulatory risk: changes in laws may restrict their use or require additional licenses.

  • Risk of losing parity (depeg): in extreme cases, a stablecoin may temporarily lose its reference value.

Stablecoins and the future of the crypto market

With the expansion of CBDCs and greater integration between traditional and digital finance, stablecoins are likely to become even more relevant. They could serve as a bridge between banks, DeFi protocols, and even everyday payments.

The challenge will be to balance convenience, decentralization, and regulatory compliance, especially as governments advance with their own digital currencies.

Have you ever thought about all this complexity behind stablecoins?

#StablecoinRevolution #USDT #USDC #Tether #DAI

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