What it means
How the target is pursued
Stablecoins use different reserve, collateral and other mechanisms. A reference value is an objective of the design, not an unconditional guarantee of the token’s market price. Issuer disclosures, reserve information and redemption terms must be evaluated for the actual asset.
Use an exact asset identity
The ticker alone does not establish the issuer, network or contract. Issuer-native tokens and bridged representations can have different dependencies. A business should also separate the ability to trade a token on an exchange from a direct redemption arrangement and from the eventual availability of fiat funds.
Related concepts
USDC, Tether USDt, PayPal USD, Fiat currency, Price volatility.
In practice
A concrete example
A merchant identifies the token and accepted network, checks the provider’s support and records how the received asset is valued.
Technical notes & boundaries
A stablecoin can lose its intended peg. It is not automatically a bank deposit, deposit-insured balance or risk-free substitute for sovereign currency.
Go to the source.
Original references used for this definition. Product details and standards can change.
