CHRISTO DE WIT: The genius of stablecoins
New US legislation could pave the way for banks and fintechs to issue their own digital cryptocurrencies
03 July 2025 - 05:00
A stablecoin is a type of cryptocurrency designed to maintain a value equal to a reference asset, such as the dollar. It combines the benefits of cryptocurrencies — fast, low-cost and borderless transactions — with the relative stability of the asset it is pegged to.
Take the USDC stablecoin. The gist is that for every USDC in circulation, there must be a corresponding dollar or similarly secure government-backed asset held in reserve. So, if there are 61.33-billion USDC tokens in circulation, Circle, the company behind USDC, must be able to prove it holds an equivalent amount in dollar reserves. ..
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