(published on 25/03/2024 and updated on 11/06/2025)
80% of people still don’t know what a stablecoin is. Yet stablecoins are a revolution that is transforming global finance and the payments industry.
Here’s a quick guide to get you started.
🎓 What is a stablecoin
A stablecoin is a kind of cryptocurrency – we prefer the term digital asset – that replicates the value of a traditional commodity. It can be the euro, the dollar, gold, silver, oil…
For example, the stablecoin EURC is worth 1 Euro (+/- 0.50%).
That’s why it’s called stable.
This is different from Bitcoin or Ether, whose value fluctuates constantly.
🚴 Simple, ultra-fast transactions
A stablecoin allows you to transfer money quickly and easily.
To send EURC to someone anywhere in the world, the experience is similar to sending an e-mail: you enter the recipient’s address, made up of 42 alphanumeric characters, and validate the security check. The recipient receives the funds in less than 5 minutes.
No bank is involved, as the transaction is totally decentralized on the blockchain. The transaction is immutably recorded on the blockchain. The wallet’s 42-character address and the amount are information that can be seen by anyone.
💸 Low cost per transaction, especially for large amounts
Currently on Ethereum, the world’s leading blockchain, the cost is around €10/transaction, whatever the transaction amount.
On recent “Layer 2” blockchains, the cost is less than €0.10/transaction.
⚖️ Stablecoin capitalization and trading volumes
As of 10/06/25, the total capitalization of stablecoins is $249 billion(live tracking here).
US dollar stablecoins are the overwhelming majority. Euro stablecoins weigh less than 1 billion.
Trading is impressive compared to capitalization. More than $100 billion a day is traded in stablecoins (well over a day).
↔️ There are two types of stablecoins
1️⃣ Semi-algorithmic stablecoins
They are guaranteed (“collateralized”) up to at least 100% by other assets at the time of issue.
For example:
- The 60 billion USDC in circulation are backed by 55 billion dollars in assets (cash 5 billion, US Treasury bills 55 billion).
- Société Générale Group’s stablecoin, Euro CoinVertible or EURCV, has 41 million euros deposited in banks to guarantee the 41 million EURCV in circulation.
- At least 130% of the crvUSD is backed by Ether or other cryptocurrencies. These guarantees are automatically partially sold if their value falls, to maintain the crvUSD’s guarantees.
2️⃣ Algorithmic stablecoins
These are simple computer codes designed to replicate the value of their underlying. There are no assets as collateral. They are fragile and, in fact, an endangered species. UST is the most famous of these algorithmic stablecoins; it exploded in flight in May 2022, and deservedly so.
We recommend working only with semi-algorithmic stablecoins , as they are backed by guarantees.
⚙️ How do stablecoins generate a return?
There are 3 main factors:
- collateral posted for stablecoins generates income that can be reinjected into the ecosystem. Circle, for example, receives a return on its $55 billion in USDC collateral.
- if they are placed in liquidity pools (= automated exchange offices), they enable you to collect part of the exchange fees between two stablecoins. For example, if you want to exchange EURC for USDC, you can go through a pool whose pair is USDC/EURC. Exchange fees are very low (unless the operation alters too much the balance of the pool between its 2 components). Part of the exchange fee is passed on to those who have placed liquidity in the pool.
- some stablecoins or platforms offer temporary incentives to encourage the use of a particular stablecoin. There are “commercial” operations to be seized.
In addition, when stablecoins are placed in liquidity pools, they can be used to boost returns through the staking mechanism.
🏢 Regulations
The days of the Wild West are over, and all the better for it: everything is rapidly becoming more professional.
In the EU, there is the “MiCA” regulation for Markets in Crypto-Assets, which is gradually coming into force in each member state. France has been at the forefront of this trend for several years now, with French regulations having partly inspired MiCA.
In the United States, things are getting structured too: the SEC requires industry players to comply with financial laws. In January 2024, it approved Spot Bitcoin ETFs, notably Blackrock’s, which has already collected over $50 billion(see article here).
💹 What rate of return
Investing stablecoins allows you to earn returns of >8%/year when you do it yourself. Interest is paid continuously. You can see your wallet grow in real time. But you need to know how to manage transactions from a wallet, and keep track of changing conditions.
We’ve written this article“How to profit from stablecoin returns“, which explains how to manage stablecoin yourself.
🔵 The easy way to enjoy it: Regular
The ultra-simple alternative, if you don’t want to manage it yourself, is our Regular account for companies and individuals.
Simply make a transfer in euros, and the balance increases daily.
By making an investment, the customer becomes the owner of a diversified portfolio of collateralized stablecoin assets:
- yield 6.40%/year
- interest paid daily
- free withdrawals at any time, funds paid out within 48 hours
- no ceiling
- 100% invested in assets
- investments in 15 different products
Customers pay no subscription fees.
Our business model: we retain the portion of the return that exceeds the portion received by the customer.
🔍 Points to watch
By choosing to work only with collateralized stablecoins, potential problems are limited, but they do not disappear completely.
Particular attention must be paid to ensuring that the value of the stablecoin does not fall behind the value of its underlying. This is known as “depeg”.
🛡️ How can we limit this uncertainty?
It becomes very low if you carefully select stablecoins with verifiable guarantees.
Care must also be taken in selecting the platforms on which stablecoins are invested, according to their age, size and security certifications by independent auditing firms.
⚔️ Safety
This is central to the added value of our product.
We perform a detailed analysis of the stablecoins, platforms, liquidity pools and performance protocols integrated into the asset portfolio. And we monitor them daily.
We apply diversification rules, with investments spread over 15 different products.
To purchase assets and hold them, we use Fireblocks in our architecture, the world leader in security for these operations.
Access to our wallets is secured by multiple factors. And, of course, we have a multi-signature system for each transaction.
