Stablecoins Explained: The Complete 2026 Guide (USDC, USDT, PYUSD, USDe)

TL;DR

• Stablecoins are blockchain tokens designed to hold a fixed value — almost always 1.00 US dollar — and the category has grown from zero in 2014 to roughly $316 billion in circulating supply by April 2026, settling more value annually than Visa.
• The market is dominated by two centralised, fiat-backed issuers: Tether's USDT (~$186B, 60% share) and Circle's USDC (~$73B, 25% share). Together they account for ~85% of all stablecoin supply.
• Two major regulatory regimes now govern the industry: the EU's MiCA (in force since June 30, 2024) and the US GENIUS Act (signed by President Trump on July 18, 2025). MiCA forced USDT off most EU exchange spot pairs by Q1 2025; the GENIUS Act creates the first federal stablecoin licence in US history.
• Beyond the giants, the 2026 landscape includes regulated newcomers like PYUSD (~$4.3B), RLUSD (~$1.5B) and USDG, decentralised over-collateralised tokens like USDS/DAI, GHO and crvUSD, and synthetic-dollar protocols like Ethena USDe (~$5.2B). Choosing the right one depends on jurisdiction, transparency, yield needs and counterparty preferences.

Table of contents

• What is a stablecoin?
• Categories of stablecoin
• USDT (Tether) — the king of stablecoins
• USDC (Circle) — the regulated alternative
• PYUSD (PayPal) — Big Tech enters the chat
• USDS / DAI (Sky / MakerDAO)
• USDe (Ethena) — the synthetic dollar
• GHO (Aave)
• crvUSD (Curve)
• FDUSD, RLUSD, USDG, GUSD and BUSD wind-down
• EU MiCA stablecoin regime
• US stablecoin legislation — GENIUS Act and beyond
• Hong Kong, Singapore, Japan and UAE regimes
• Stablecoin use cases
• Failures and risks — Terra, USDC depeg, USDR
• How to choose a stablecoin
• FAQ
• Glossary

What is a stablecoin?

A stablecoin is a cryptocurrency engineered to keep a constant value — almost always 1.00 of a fiat currency such as the US dollar or euro. Whereas bitcoin and ether swing 5-10% in a day, a well-designed stablecoin trades inside a tight band ($0.998-$1.002), making it usable as a medium of exchange, unit of account and on-chain savings vehicle.

The peg is held by some combination of three mechanisms: fiat reserves (the issuer holds $1 of cash or T-bills per token), crypto over-collateralisation (a smart contract holds $1.50 of ETH or BTC per $1.00 minted), or a delta-neutral basis trade (long spot plus short perp, pioneered by Ethena's USDe). Pure algorithmic designs without hard backing — most famously TerraUSD — have repeatedly failed and are now banned under both MiCA and the GENIUS Act.

Stablecoins are the load-bearing wall of crypto: they settle most spot volume on Binance, Coinbase and OKX; they carry the majority of on-chain transaction value on Ethereum, Tron and Solana; and they're the de-facto rails for cross-border B2B payments, remittances and EM savings. April 2026 total market cap ~$316B, up from $130B at the start of 2024. Tether alone reported $10B+ in 2025 net profit and is among the world's 20 largest holders of US Treasury debt.

Categories of stablecoin

Stablecoins are grouped by how the peg is maintained and whether they pay yield.

• Fiat-collateralised, centralised — a regulated issuer holds cash, T-bills and MMFs; tokens are mintable/burnable 1:1. Dominate the market by an order of magnitude. Examples: USDT ($186B), USDC ($73B), PYUSD ($4.3B), FDUSD (~$2B), RLUSD ($1.5B), USDG (~$0.6B), GUSD, TUSD.
• Decentralised, over-collateralised — a smart contract takes ETH, stETH, BTC, USDC or tokenised T-bills at 110-200% and mints a stablecoin with automatic liquidations. Examples: USDS/DAI (~$8B), GHO, crvUSD, LUSD/BOLD, Frax/frxUSD.
• Synthetic / delta-neutral — pioneered in 2024 by Ethena's USDe: hold spot collateral, short the same notional in perps, capture funding plus staking yield. Newer entrants: Resolv USR, Falcon USDf and copycats.
• Yield-bearing wrappers and tokenised T-bills — strictly tokenised MMFs but functionally interchangeable for treasury: BUIDL (BlackRock, ~$2.5B), USDY (Ondo), USDM (Mountain), AUSD (Agora), sUSDe, sUSDS.
• Commodity-backed — pegged to gold: PAXG (Paxos, ~$1.2B) and XAUt (Tether, ~$1.0B).
• Algorithmic (largely defunct) — TerraUSD, USDD, legacy Frax v1 have either collapsed or pivoted. New algorithmic launches are now blocked under MiCA and the GENIUS Act.

USDT (Tether) — the king of stablecoins

Tether, founded in 2014, is the largest and most controversial company in crypto. Its flagship product, USDT, is the most-traded asset in the world by daily on-chain volume — beating bitcoin, ether and the entire S&P 500 ETF complex on most days. CEO Paolo Ardoino (since December 2023) moved Tether's global HQ to El Salvador in early 2025 under a local DASP licence; the company reported $10B+ in net profit for full-year 2025.

Per the Q4 2025 attestation signed by BDO Italia:

• USDT liabilities: $186.5B; reserves $192.8B (excess $6.3B)
• US Treasuries: $122.3B (~63%) plus $19.3B reverse repos and ~$13B money-market funds
• Other: ~$6B cash, $17B gold, $8B bitcoin, plus secured loans and corporate bonds

In late 2024 Tether launched USDT0, an omnichain version built on LayerZero's OFT standard, now live on 30+ chains including Arbitrum, Optimism, Base, Berachain, TON and Sui.

USDT has been the subject of two US enforcement actions: a February 2021 NYAG settlement ($18.5M) and an October 2021 CFTC settlement ($41M), both over historical reserve disclosures (2016-2018). Tether has never been audited (only attested), is not authorised under MiCA and has not yet pursued a federal licence under the GENIUS Act. USDT was delisted from spot trading on Coinbase Europe (Dec 2024), Crypto.com EEA (Jan 2025), Binance EEA (Mar 31, 2025) and Kraken EU — EEA users can still hold and transfer USDT, but retail spot pairs are gone. See our Tether reserves deep dive and the BIS working paper on stablecoin runs.

USDC (Circle) — the regulated alternative

Circle was founded in 2013 by Jeremy Allaire and Sean Neville. USDC launched September 2018 as a joint venture with Coinbase under the Centre Consortium, which was dissolved in August 2023 when Circle took 100% control. Circle has positioned USDC from day one as the regulated, transparent alternative to USDT: reserves sit at BNY Mellon and other Tier-1 US banks, with the bulk in the Circle Reserve Fund (USDXX), an SEC-registered government MMF managed by BlackRock. Reserves are attested monthly by Deloitte.

Circle's IPO. On June 5, 2025, Circle Internet Group Inc (ticker CRCL) listed on the NYSE at $31 per share. The IPO upsized to ~$1.1B; shares opened at $69 — a 123% pop. Lead underwriters: JPMorgan, Citi, Goldman Sachs. By April 2026 CRCL trades around $200, valuing Circle near $50B.

CCTP — native cross-chain USDC. Circle's Cross-Chain Transfer Protocol burns USDC on the source chain and mints native USDC on the destination chain — eliminating the wrapped-bridge tail risk that has plagued the industry. CCTP V1 (April 2023) covers Ethereum, Avalanche, Optimism, Arbitrum, Base, Polygon, Solana, Noble and Sui. CCTP V2 (March 2025) added fast-finality bridging and a hooks system for composable cross-chain logic.

The 50/50 Coinbase deal. Per the August 2023 amended agreement, Coinbase keeps 100% of reserve interest on USDC held in Coinbase wallets and splits off-platform interest 50/50 with Circle. In 2024 this transferred ~56% of USDC reserve revenue (~$900M) to Coinbase.

MiCA-compliant from day one. In July 2024 Circle became the first major issuer to receive a MiCA EMT licence (France ACPR) for both USDC and EURC. USDC remains tradable across the EEA — a moat that boosted its EU market share materially after the USDT delistings.

PYUSD (PayPal) — Big Tech enters the chat

PayPal's PYUSD launched on August 7, 2023 on Ethereum, the first stablecoin from a major US fintech with 400M+ users. It is issued by Paxos Trust Company under a NYDFS charter, with monthly attestations and reserves in cash, T-bills and overnight repos.

PayPal expanded PYUSD to Solana on May 29, 2024, dramatically cutting transaction costs and unlocking DeFi distribution. Subsequent launches on Arbitrum, Stellar, Tron and Avalanche accelerated growth. By April 2026, PYUSD's market cap hit a record $4.3B — the fourth-largest USD stablecoin behind USDT, USDC and USDe. PYUSD became the second-largest stablecoin on Solana lending protocol Kamino with $500M+ deposited, and powers Xoom remittances. PYUSDx (February 2026, Paxos/MoonPay/M0) lets developers issue branded application-specific stablecoins backed 1:1 by PYUSD reserves.

USDS / DAI (Sky / MakerDAO)

MakerDAO, founded by Rune Christensen in 2014, was the first decentralised stablecoin issuer at scale. DAI is a soft-pegged USD stablecoin minted against over-collateralised Ethereum-based Maker Vaults.

In September 2024, MakerDAO executed the most ambitious rebrand in DeFi history: the protocol became Sky, DAI became upgradeable to USDS, and the MKR governance token became SKY at a 24,000:1 ratio. The migration is part of Christensen's Endgame Plan — a multi-year roadmap to split Maker into a federation of "Sky Stars" (autonomous SubDAOs).

The 2026 Sky stack includes USDS (~$8B supply); the Sky Savings Rate (SSR) paying ~4.5% to sUSDS holders; Spark Protocol (first Sky Star, isolated USDS lending markets); and RWA-heavy backing — 50%+ of Sky's collateral is now in tokenised T-bills, US Treasury ETFs and BlackRock's BUIDL fund, versus nearly 100% crypto in 2021. DAI continues to trade at parity (1:1 swap to USDS indefinitely); Binance auto-converted EU DAI balances to USDS on April 7, 2026. USDS does not have a MiCA licence and was delisted from EEA spot trading.

USDe (Ethena) — the synthetic dollar

Ethena Labs, founded by Guy Young in 2023, launched USDe in early 2024 as the first major delta-neutral synthetic dollar. Inspired by Arthur Hayes's "Dust on Crust" essay, USDe maintains its peg without holding dollars at all.

How it works: users deposit stETH, ETH, BTC or USDC; Ethena holds collateral with regulated custodians (Copper, Ceffu, Fireblocks) and opens an equal-notional short perpetual futures position on a major venue (Binance, Bybit, OKX, Deribit). Long spot + short perp = zero delta. The position earns (a) stETH staking rewards plus (b) the funding rate that perp longs pay shorts. Stakers receive sUSDe which captures the yield — APYs of ~10-30% in 2024-early 2025.

USDe peaked at ~$15B in mid-2025 before contracting to ~$5.2B by April 2026 following an October 2025 perp-funding flush and a deliberate de-risking. Ethena diversified backing, capping perps at ~11% with the rest in T-bills (via USDtb, Ethena's BlackRock-backed sister token) and institutional lending. sUSDe yields compressed to ~4-6% APY as a result. Bull case: it scales without fiat banking rails. Bear case: yield depends on positive funding, and custodial-exchange exposure is a single fat-tail risk.

GHO (Aave)

GHO is Aave's native over-collateralised stablecoin, launched July 2023 on Ethereum and now live on Arbitrum, Avalanche, Base and Gnosis Chain. Users mint GHO against any Aave V3 collateral, with interest rates set by Aave governance. Supply ~$400M (April 2026), governed via the Aave Chan Initiative (ACI). Killer feature: stkAAVE discount — AAVE stakers get up to 30% off borrow rates, creating a flywheel between protocol revenue and AAVE staking demand.

crvUSD (Curve)

crvUSD is Curve Finance's over-collateralised stablecoin, launched May 2023. Its proprietary LLAMMA (Lending Liquidating AMM Algorithm) gradually swaps collateral into crvUSD across a price band instead of binary liquidations — smoothing forced selling and dramatically reducing bad-debt risk on volatile moves. Supply ~$200M, collateral options ETH, wstETH, sfrxETH, WBTC, tBTC. The PegKeeper mechanism mints/burns crvUSD into Curve stable pools with no external dependencies — widely considered one of the most technically elegant stablecoin designs ever shipped.

FDUSD, RLUSD, USDG, GUSD and BUSD wind-down

• FDUSD — issued June 2023 by Hong Kong-based First Digital Trust. Became Binance's de-facto USDT-replacement after BUSD wind-down. Reserves in cash, T-bills, overnight repos; supply ~$2B. Concerns about ownership and reserve transparency surfaced in 2025 but the peg has held.
• RLUSD — launched December 17, 2024 on Ethereum and XRPL by Ripple subsidiary Standard Custody & Trust under NYDFS. 100% cash + short Treasuries. Passed $1B in November 2025 and reached $1.5B by April 2026 — the third-largest US-regulated stablecoin behind USDC and PYUSD. Brad Garlinghouse positions RLUSD as the institutional XRPL settlement layer.
• USDG (Global Dollar) — launched November 2024 by Paxos under the Singapore MAS framework. The first multi-issuer "consortium" stablecoin: members (Robinhood, Galaxy, Anchorage, Bullish, Kraken, Nuvei) share reserve interest. ~$600M.
• GUSD (Gemini Dollar) — 2018-vintage, longest-running NYDFS-regulated stablecoin. Shrunk from $700M (2022) to ~$100M as Gemini volumes declined.
• BUSD wind-down — Binance USD was issued by Paxos until February 2023, when NYDFS ordered issuance halted. Supply is now sub-$50M and Binance uses FDUSD as its primary pair.

EU MiCA stablecoin regime

The Markets in Crypto-Assets Regulation (MiCA) is the EU's comprehensive crypto framework, adopted June 2023. Stablecoin chapters entered into force on June 30, 2024; the rest followed on December 30, 2024. MiCA creates two stablecoin categories:

• E-Money Tokens (EMT): pegged to a single fiat. Must be issued by an authorised credit/e-money institution. 1:1 fiat reserve, segregated, no interest, redeemable at par on demand.
• Asset-Referenced Tokens (ART): pegged to a basket of assets. Higher capital and disclosure requirements.

Significant EMTs/ARTs (>€5B reserves, 2.5M monthly users, or €500M monthly transactions) are supervised directly by the EBA. Non-EUR EMTs face a €200M daily transaction cap for "means of exchange" use — a controversial sovereignty provision.

By April 2026, MiCA-authorised stablecoins include USDC, EURC, EURCV (Société Générale-FORGE), EURI (Banking Circle), Monerium EURe, StablR EURR/USDR, Quantoz USDQ and a small number of others. Germany's BaFin authorised the first batch of CASPs in early 2025 (Coinbase Europe, Bitpanda, BitGo). USDT, USDe, FDUSD, DAI/USDS, PYUSD and most other major stablecoins are not authorised — progressively delisted from EEA spot trading: Coinbase Europe (December 2024), Crypto.com (January 31, 2025), Binance EEA (March 31, 2025), Kraken EU (early 2025).

US stablecoin legislation — GENIUS Act and beyond

For most of stablecoins' history the United States had no federal framework — only NYDFS state-level oversight (June 2022 guidance) and selective SEC/CFTC/Treasury enforcement. That changed in 2025.

The GENIUS Act — Guiding and Establishing National Innovation for U.S. Stablecoins — was introduced February 4, 2025 by Senators Bill Hagerty, Cynthia Lummis, Kirsten Gillibrand and Tim Scott. It passed the Senate 68-30 on June 17, 2025 and the House 308-122 on July 17, 2025. President Donald Trump signed it on July 18, 2025.

Key provisions:

• Federal licensing of "permitted payment stablecoin issuers" (PPSI); state licence under $10B supply, OCC/Fed above.
• 100% reserve backing in cash, demand deposits and ≤93-day US Treasuries.
• Monthly public disclosure of reserves, certified by a registered public accounting firm.
• Bank Secrecy Act / AML compliance.
• Not a security, not a commodity — exempt from SEC and CFTC oversight.
• No interest on payment stablecoins (yield must be structured separately).
• Algorithmic stablecoins effectively prohibited.
• Foreign issuers (e.g. Tether) must register or face restrictions on US trading platforms.

The Act takes effect on the earlier of 18 months after enactment (≈January 2027) or 120 days after final rules. Other US frameworks: the STABLE Act 2025 (House version, largely subsumed), the Lummis-Gillibrand PSA (2024 basis for GENIUS), NYDFS guidance (still binding on Paxos, Gemini, Circle, Ripple), and the BUSD wind-down (February 2023, the most consequential pre-GENIUS US action).

Hong Kong, Singapore, Japan and UAE regimes

• Hong Kong. The Stablecoins Ordinance passed LegCo May 21, 2025 and came into force August 1, 2025. HK fiat-referenced stablecoin issuers (and foreign issuers of HKD-pegged tokens) require an HKMA licence. A six-month transitional period ran to early 2026; the HKMA Stablecoin Issuer Sandbox (July 2024) onboarded the first applicants.
• Singapore. The MAS Single-Currency Stablecoin (SCS) framework (August 2023): SGD- or G10-pegged tokens issued in Singapore require MAS authorisation with 100% cash-equivalent reserves and 5-business-day redemption. USDG is one of the first SCS-aligned tokens.
• Japan. The PSA amendment (in force June 1, 2023) made Japan the first major economy to legalise stablecoins — but only banks, trust banks and licensed MTAs may issue. JPYC, DCJPY and USDC (via SBI VC Trade) are the early offerings; RLUSD launched in Japan via SBI Holdings in Q1 2026.
• UAE. The CBUAE Payment Token Services Regulation (June 2024) created a stablecoin licence for AED-pegged tokens. AE Coin (AEC) received the first licence in 2025.

Stablecoin use cases

• Payments + remittance. Stripe acquired Bridge for $1.1B (October 2024, closed February 2025) — its largest M&A ever. PayPal/Xoom integrated PYUSD. Visa added native USDC settlement on Solana in 2023; Mastercard's Multi-Token Network went live in 2024. Solana Pay handled billions in USDC merchant volume via Shopify in 2025.
• Savings — yield-bearing. With T-bill yields above 4%, on-chain dollars now offer attractive returns: sUSDS ~4.5%, sUSDe 4-15%, USDY ~4.7%, BUIDL ~4.3%.
• Tokenised-asset settlement. Tokenised T-bills, equities (Ondo Global Markets, Securitize, Backed) and private credit (Maple, Centrifuge) settle in stablecoins. On-chain RWA crossed $50B in early 2026.
• EM treasury management. USDT and USDC dominate household USD savings in Argentina, Turkey, Nigeria, Lebanon and Venezuela.
• DeFi liquidity. ~$30B of DeFi TVL is in stablecoins — the dominant quote asset on Uniswap, Aave, Curve, Pendle, Hyperliquid.

Failures and risks — Terra, USDC depeg, USDR

Stablecoins are not risk-free. The category has lost more user capital than any other in crypto outside exchange collapses.

• Terra Luna — May 2022 (~$40B wiped). TerraUSD (UST) peaked at $18B backed by a mint-burn relationship with LUNA, with most demand parked in Anchor Protocol's 20% APY. Withdrawals from Anchor de-pegged UST on May 7-12, triggering a hyperinflationary LUNA mint death-spiral that wiped UST+LUNA from ~$60B to near zero. The cascade triggered the failures of Three Arrows Capital, Voyager Digital and Celsius Network. Do Kwon was extradited to the US in late 2024 and pleaded guilty. Both MiCA and the GENIUS Act now effectively prohibit algorithmic designs.
• USDC depeg — March 2023. SVB's collapse stranded $3.3B of USDC reserves. With weekend redemptions impossible and FDIC coverage uncertain, USDC traded as low as $0.87 on March 11 before re-pegging when the Fed/Treasury/FDIC guaranteed all deposits on March 13. Circle subsequently consolidated reserves at BNY Mellon and BlackRock.
• Other depegs. USDR (Tangible, Oct 2023, real-estate-collateral shortfall, ~50% loss); USDD (Tron, repeatedly below peg 2022-2024); MIM (Wonderland/CRV exposure, early 2022); DEI (Deus Finance, exploited May 2022); IRON Finance (June 2021 algorithmic collapse); flexUSD (CoinFLEX 2022); HUSD (Huobi, depegged August 2022).

The pattern is clear: algorithmic, exotic-collateral, or under-transparent stablecoins fail under stress; major fiat-backed or robustly over-collateralised tokens have so far recovered.

How to choose a stablecoin

The "best" stablecoin depends on your jurisdiction, counterparty needs, yield appetite and risk tolerance. The matrix below summarises the top 10 by market cap as of April 2026.

Top 10 stablecoins — comparison table (April 2026)

Decision framework

• EU/EEA regulated: USDC or EURC (both MiCA EMT). Avoid USDT, USDe, USDS.
• US institutional treasury: USDC, PYUSD or RLUSD — all NYDFS-supervised with monthly T-bill-backed attestations.
• Maximum trading liquidity: USDT — still the deepest order books on Binance, OKX, Bybit and OTC desks worldwide.
• Decentralised, no centralised issuer risk: USDS, crvUSD, GHO or BOLD.
• Yield-seeking: sUSDe (highest, variable), sUSDS (steadiest), USDY or BUIDL (pure T-bill).
• Cross-chain payments: USDC via CCTP V2 is cleanest; USDT0 (LayerZero) is deepest by chain count.

Regulatory framework comparison

USDC vs USDT — the head-to-head most readers want

FAQ

What is the safest stablecoin in 2026?

USDC and PYUSD are the safest mainstream USD stablecoins for most users — both are US-regulated, hold reserves at Tier-1 banks in short-dated Treasuries, and publish monthly attestations. USDT is the largest and most liquid but is no longer authorised in the EU. For decentralised exposure, USDS and crvUSD have multi-year track records.

USDC vs USDT — which one should I use?

USDT is best for trading, OTC and Asia/EM remittance — deepest liquidity on Binance/OKX/Bybit, omnichain via USDT0. USDC is best for US/EU regulated rails, CCTP cross-chain payments, treasury cash management and any flow needing MiCA compliance. If your counterparty is in the EEA, USDT spot pairs are no longer available — use USDC, EURC or PYUSD.

Are stablecoins backed 1:1 by real dollars?

Fiat-collateralised tokens (USDC, PYUSD, RLUSD, USDG) hold ~100% in cash and short Treasuries. USDT holds ~82% in T-bills, with the rest in repos, MMFs, gold and bitcoin. Decentralised stablecoins like USDS and crvUSD are over-collateralised 110-200% in crypto + RWAs. USDe uses a delta-neutral basis trade rather than fiat backing.

What is a yield-bearing stablecoin and is it legal?

A yield-bearing stablecoin pays the holder a return from Treasuries, lending or basis trades — examples are sUSDe, sUSDS, USDY, USDM, BUIDL. Under the GENIUS Act and MiCA EMT regime, payment stablecoin issuers cannot pay yield directly, so yield products are structured as separate tokenised funds or staking wrappers.

Is Tether (USDT) safe? What about its reserves?

USDT is the largest stablecoin in the world ($186B Q4 2025) and has held its peg through multiple crises. Reserves are attested quarterly by BDO Italia: $122B in T-bills, $19B in repos, plus MMFs, gold ($17B) and bitcoin ($8B). Critics point to the lack of a full audit, the 2021 NYAG and CFTC settlements, and the absence of a US/EU regulator. Solvency risk is low under normal conditions; counterparty + regulatory risk is materially higher than USDC.

How does USDe (Ethena) make 10-30% yield?

USDe holds long staked-ETH/BTC collateral and shorts the same notional in perpetual futures, capturing ETH staking rewards plus perp funding paid by leveraged longs. When funding is positive, sUSDe stakers earn 4-15% APY (peaks have hit 30%). Backing was diversified in late 2025 to cap perps at ~11%, with the rest in T-bills (via USDtb) and institutional lending — yields have compressed accordingly.

What is the GENIUS Act?

The GENIUS Act is the first US federal stablecoin law, signed by President Trump on July 18, 2025. It creates federal licensing for "permitted payment stablecoin issuers", requires 100% reserves in cash and ≤93-day Treasuries, mandates monthly public disclosures, applies the Bank Secrecy Act, and confirms compliant stablecoins are not securities. State licensing covers issuers under $10B; above that, OCC/Fed take over. Effective ~January 2027.

What stablecoins are MiCA-compliant in the EU?

MiCA-authorised EMTs include USDC and EURC (Circle/ACPR), EURCV (Société Générale-FORGE), EURI (Banking Circle), Monerium EURe, StablR EURR and Quantoz USDQ. USDT, FDUSD, DAI/USDS, USDe and PYUSD are not authorised — delisted from EEA spot trading on Binance, Coinbase, Kraken, Crypto.com and OKX by Q1 2025.

What was the Terra Luna collapse?

TerraUSD (UST) was an algorithmic stablecoin maintained by mint/burn against LUNA. In May 2022, withdrawals from Anchor Protocol's 20% yield triggered a death spiral as arbitrageurs minted hyperinflationary LUNA. The combined UST+LUNA market cap collapsed from ~$60B to near zero in a week, wiping ~$40B of investor capital and triggering the 3AC, Voyager and Celsius bankruptcies. Both GENIUS and MiCA now effectively prohibit algorithmic designs.

Did USDC depeg during the Silicon Valley Bank collapse?

Yes. On March 10-11, 2023, Circle disclosed $3.3B of USDC reserves stuck at SVB. USDC traded as low as $0.87 over that weekend before re-pegging once the FDIC guaranteed all SVB deposits on March 13. Circle moved reserves to BNY Mellon and BlackRock and consolidated its banking partners. No redemptions failed, but the episode showed that fiat-backed stablecoins inherit their custodian banks' credit risk.

Glossary

• Attestation: a third-party accounting firm's signed statement that an issuer's reserves match its liabilities at a point in time. Less rigorous than a full audit. Tether uses BDO Italia; Circle uses Deloitte; PYUSD uses Withum.
• Basis trade: a delta-neutral position consisting of long spot and short futures (or vice versa). Earns the funding-rate spread. Underpins Ethena USDe.
• CCTP (Cross-Chain Transfer Protocol): Circle's burn-and-mint mechanism for moving native USDC between chains without a wrapped-token bridge.
• CDP (Collateralised Debt Position) / Vault: a smart-contract position holding crypto collateral against a stablecoin loan. The original Maker primitive; renamed "vault" in modern Sky.
• Depeg: when a stablecoin trades meaningfully off its target value (usually 1.00 USD). Brief depegs (<1%) are normal; sustained or large depegs signal stress.
• EMT (E-Money Token): under MiCA, a stablecoin pegged to a single fiat currency. Must be issued by an authorised credit or e-money institution.
• LLAMMA: Curve's liquidating-AMM mechanism that gradually swaps collateral instead of binary liquidations. Used by crvUSD.
• Over-collateralisation: holding more collateral value than stablecoin issued (e.g. $150 of ETH for $100 of USDS). Standard in decentralised stablecoin design.
• PPSI (Permitted Payment Stablecoin Issuer): the licensed entity category under the GENIUS Act.
• Reserves: the assets held by a stablecoin issuer to back outstanding tokens. Quality matters: cash + short-T-bills > commercial paper > crypto > algorithmic claims.
• Synthetic dollar: a stablecoin that maintains its peg without holding fiat at all. USDe is the leading example.
• Yield-bearing stablecoin: a token that distributes interest, basis-trade profits or staking rewards to holders. sUSDe, sUSDS, USDY, BUIDL.

Related reading (internal links)

• What is DeFi? The 2026 Guide
• Ethereum Explained: 2026 Guide
• Solana Explained: 2026 Guide
• MiCA Regulation Explained
• Yield-Bearing Tokens Explained
• Real-World Assets (RWA) on Chain — 2026 Guide
• CBDC vs Stablecoin — Key Differences
• The Terra Luna Collapse, Explained

Sources and further reading

• White House Fact Sheet on the GENIUS Act, July 2025: https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/
• S.1582 GENIUS Act — Congress.gov: https://www.congress.gov/bill/119th-congress/senate-bill/1582
• SEC Chair Atkins statement on GENIUS Act: https://www.sec.gov/newsroom/speeches-statements/atkins-statement-genius-act-071825
• EU MiCA Regulation (2023/1114) text: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R1114
• ESMA crypto-assets policy hub: https://www.esma.europa.eu/policy-activities/crypto-assets-and-their-markets
• BIS Working Paper — stablecoin design & runs: https://www.bis.org/publ/bppdf/bispap138.htm
• FSB High-Level Recommendations on Global Stablecoin Arrangements: https://www.fsb.org/2023/07/high-level-recommendations-for-the-regulation-supervision-and-oversight-of-global-stablecoin-arrangements-final-report/
• IMF Fintech Notes — stablecoins and macro stability: https://www.imf.org/en/Publications/fintech-notes
• HKMA Stablecoin Issuers regime: https://www.hkma.gov.hk/eng/key-functions/international-financial-centre/stablecoin-issuers/
• MAS regulatory approach to stablecoin activities: https://www.mas.gov.sg/regulation/explainers/regulatory-approach-to-stablecoin-related-activities
• NYDFS USD-backed stablecoin guidance, June 2022: https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220608_issuance_stablecoins
• Tether transparency portal (BDO attestations): https://tether.to/en/transparency/
• Circle transparency hub (Deloitte attestations): https://www.circle.com/transparency
• Stripe completes Bridge acquisition (Feb 2025): https://stripe.com/newsroom/news/stripe-completes-bridge-acquisition
• DefiLlama Stablecoins dashboard (live market caps): https://defillama.com/stablecoins
• Ethena USDe documentation: https://ethena.fi/
• Sky Protocol (formerly MakerDAO): https://sky.money/
• Ripple — RLUSD launch announcement: https://ripple.com/insights/ripple-announces-launch-of-rlusd-stablecoin/

About the author

DeFi Intel Research is an independent crypto research desk focused on on-chain market structure, MEV, stablecoin reserves and DeFi infrastructure. We maintain a knowledge graph of 2,400+ projects, papers and entities and publish data-driven primers. The author has tracked stablecoin issuance, reserves and regulation since 2019. Nothing on this page is investment advice — always read the latest issuer attestation and your local regulatory guidance before holding or transferring stablecoins.

Last updated 2026-04-26