What is a stablecoin, and is it actually stable?
A token whose issuer promises it is worth a dollar. The promise is the product, and the promise is the risk.
A stablecoin is a token that a company issues and promises to redeem for one unit of a currency, usually a dollar. It holds its price because that promise is generally believed — not because of anything the software does.
So the question is never "is it stable". It is "who is promising, what are they holding, and can they be made to pay". Reserve reports, the jurisdiction of the issuer, and whether ordinary holders can redeem directly are the three things that separate them.
Stablecoins backed by an algorithm rather than assets have failed completely, more than once, and the failures were sudden.
It also matters which network you hold it on: the same ticker exists on many chains and they are not interchangeable in a transfer.
Coins, tokens and stablecoins and Is USDT the same as Bitcoin? go further.
Last checked 19 Oct 2026.