Stablecoin
A crypto token built to hold a steady value, normally one US dollar, backed by reserves the issuer holds.
Stablecoins are tokens designed to follow the value of a fiat currency, nearly always the US dollar. Tether (USDT) and USD Coin (USDC) are the biggest. Their issuers state that every token is backed by reserves such as cash and short-dated government debt.
Why gamblers use them
Bitcoin and similar coins can gain or lose several percent during a single session. Depositing a stablecoin keeps your balance from doubling as a crypto market position. Stablecoins also circulate on quick, low-cost networks such as Tron and Solana.
What can go wrong
- Issuer risk: the token is worth only what the issuer's reserves and redemption capacity can support.
- Currency risk: it follows USD, so if you think in euros, Canadian dollars or another currency, the exchange rate still moves its value.
- Access depends on local regulation. In Canada, for instance, the stablecoins that trading platforms may offer have changed over time.
Illustration
You deposit 500 USDT, and while you play Bitcoin falls 5%. That move leaves your balance untouched, though shifts in the exchange rate would still alter what it is worth in your home currency.