Stablecoins: what are they really used for in 2026?

The word stablecoin suggests something simple: a digital token designed to retain a stable value, usually close to one dollar or one euro.

This apparent stability does not mean that a stablecoin works like money in a bank account. Its value depends on an issuer, reserves, redemption mechanisms, a blockchain and technology providers.

By 2026, stablecoins had become one of the most widely used forms of infrastructure in the Blockchain ecosystem. They support trading, but also payments, international transfers, DeFi and the settlement of tokenised assets.

Visa estimated total stablecoin supply at $274 billion at the end of 2025, following growth of more than 50% during the year. By mid-July 2026, the RWA.xyz dashboard showed a value close to $300 billion. These figures change quickly, but they show that the subject is no longer a niche use case.

What is a stablecoin?

A stablecoin is a crypto-asset designed to track the value of a reference asset.

The most common case is a token targeting a value of one dollar. It can circulate across several blockchains, be sent to a wallet and be used in decentralised applications.

The word “stable” describes a price objective, not an absolute guarantee. A stablecoin can temporarily or permanently lose its peg if reserves are insufficient, the issuer encounters a problem or the economic mechanism fails.

The three main types of stablecoin

Stablecoins backed by traditional currencies

They are issued against reserves made up of cash, bank deposits or highly liquid securities.

USDT and USDC track the dollar. Stablecoins such as EURC or EURCV seek to stay close to the euro.

Their resilience depends in particular on:

• the quality of the reserves
• their availability
• the ability to request redemption
• the issuer’s governance
• the audits and attestations published

Stablecoins overcollateralised with crypto-assets

They are created by depositing digital assets in a protocol. The deposit’s value usually needs to exceed the value of the stablecoins issued so it can absorb a decline in the collateral.

This model reduces dependence on a single bank-backed issuer, but creates other risks: collateral volatility, automatic liquidation, smart-contract errors and protocol governance.

Algorithmic stablecoins

They try to maintain their price through incentives, token creation and destruction, or an associated asset.

The collapse of TerraUSD in 2022 showed that a mechanism presented as stable can enter a downward spiral when confidence disappears. This category requires particular caution, especially when real reserves are limited or absent.

Why are stablecoins used so widely?

Moving away from volatility without leaving the blockchain

A user can convert a volatile asset into a stablecoin without immediately returning to a bank account. The value therefore remains available on-chain for another transaction.

This remains an important use, but it no longer explains market growth on its own.

Sending value internationally

A stablecoin can move within minutes, including outside banking hours. For some businesses and individuals, it can reduce delays and simplify transfers between countries.

The final cost nevertheless depends on the blockchain, conversion into local currency, platform fees and the provider’s compliance processes.

Settling business-to-business transactions

Stablecoins can serve as a settlement asset for suppliers, platforms or digital services. They are being studied in particular for programmable payments and exchanges between tokenised infrastructures.

In Europe, the European Central Bank envisages an ecosystem in which several forms of digital money could coexist: central-bank money, tokenised bank deposits and euro stablecoins.

Using DeFi

Lending, exchange and liquidity protocols make extensive use of stablecoins. They provide a unit of account and make it possible to build products whose value is not directly tied to fluctuations in Bitcoin or Ether.

A yield displayed on a stablecoin is not risk-free. It may compensate for lending, providing liquidity, exposure to a protocol or counterparty risk.

Buying and settling tokenised assets

Securities, funds, commodities and other tokenised RWAs need a settlement asset compatible with Blockchain infrastructure.

A stablecoin can allow the asset and its payment to be exchanged in the same environment. This technical proximity reduces certain steps, but it still needs to work with financial rules and traditional infrastructure.

Automating payments

A smart contract can automatically send a stablecoin when a condition is met: a deadline, delivery approval, income distribution or completion of a digital service.

This programmability creates useful possibilities for software, marketplaces and future autonomous agents. It also increases the importance of secure code and carefully managed permissions.

USDT, USDC and euro stablecoins: what are the differences?

USDT and USDC dominate the market and track the US dollar. Their broad distribution gives them strong liquidity across many platforms and blockchains.

For a European user, that dominance creates dollar exposure. A stablecoin that remains worth one dollar can still rise or fall in euro terms as the exchange rate changes.

Euro stablecoins reduce this currency risk for spending and accounting in the euro area. Their market remains smaller, with liquidity and availability often below that of dollar stablecoins.

The choice should therefore not be based solely on the name of the currency. The issuer, reserves, network, fees and conversion options all need to be examined.

What MiCA changes in Europe

The European MiCA regulation distinguishes, among other categories, e-money tokens that track an official currency and asset-referenced tokens that track other assets.

For stablecoins tracking a currency such as the euro or dollar, the framework imposes requirements on the issuer, reserves, disclosures and redemption. Issuers of e-money tokens must be authorised institutions under the applicable European rules.

MiCA also prohibits the issuer or service provider from paying interest merely for holding an e-money token, as if it were an interest-bearing savings product.

That does not mean no application will offer a yield involving a stablecoin. Any such yield then comes from a separate service, with its own risks.

Since July 2026, crypto-asset service providers active in France have needed MiCA authorisation or must operate within the relevant European framework. Checking the AMF’s whitelist is a useful precaution before using a platform.

Risks to understand

Depegging risk

The price can move away from its target. A small temporary variation is not as serious as a lasting loss caused by insufficient reserves.

Issuer risk

A centralised stablecoin depends on its management, banking partners and reserve assets.

Blockchain risk

Fees, congestion, a cross-chain bridge or smart contract can create a layer of risk independent of the stablecoin itself.

Platform risk

Holding a stablecoin on an exchange means depending on that intermediary. The risk differs from holding it in a personal wallet.

Freezing risk

Some issuers can block addresses, particularly to comply with legal obligations or respond to an attack. This ability may protect the ecosystem, but it is also a reminder that not every stablecoin is decentralised.

Currency risk

A dollar stablecoin is stable only in dollars. Its value in euros changes with the foreign-exchange market.

Tax risk

Depending on the transaction and country of residence, converting, spending or using a stablecoin may have tax consequences. The phrase “digital money” does not mean it is treated exactly like euros held at a bank.

How to choose a stablecoin

Before using one, check:

1. the reference currency or asset
2. the issuer’s identity and regulatory status
3. the composition of the reserves
4. redemption conditions
5. audit reports or attestations
6. liquidity on the platforms you use
7. the blockchain and exact contract address
8. transfer and conversion fees
9. whether freezing or blacklisting functions exist
10. why you intend to hold the stablecoin

The final question is essential. A stablecoin held for a few hours to settle a transaction does not have the same risk profile as savings held for several years.

A simple comparison to remember

In a training session, one comparison often helps: a stablecoin is like a digital casino chip that can move across several tables, but whose value depends on the cashier being able to redeem it at the stated price.

The analogy has limits, but it highlights three points: the token circulates, the issuer matters and convertibility is central.

In summary

Stablecoins bridge traditional money and blockchains. They facilitate transfers, payments, DeFi and settlement for tokenised assets.

They are not all built in the same way and do not provide the same safeguards. Price stability should not distract from the reserves, issuer, blockchain, platform and regulatory framework.

In 2026, their role is becoming more strategic for businesses and financial institutions. Their use remains healthier when it answers a precise need rather than simply chasing a yield presented as risk-free.

Understand stablecoins in practice

Would you like to include stablecoins in a course, understand their role in DeFi or assess a payment use case? Learning formats can be adapted for individuals, students and professionals.