What is a stablecoin?

A stablecoin is a crypto asset designed to hold a steady value by tracking a reference — most often a fiat currency such as USD or EUR. Where Bitcoin moves freely, a stablecoin aims for 1 unit = 1 dollar (or euro).

The stability typically comes from reserves: the issuer holds assets (cash and short-term government bonds) matching the tokens issued. Examples include USDC (USD) and Aryze eEUR (EUR).

The most common are fiat-backed stablecoins, where each token is covered 1:1 by reserves in a currency. There are also crypto-collateralised and algorithmic variants, but those are more complex and historically more risky.

Under the EU’s MiCA, fiat-pegged stablecoins are regulated as "e-money tokens" (EMTs) with reserve and issuer-authorisation requirements. That is a meaningful difference from unregulated tokens.

Stablecoins are used to "park" value between trades without going back to a bank account, to move value quickly on the blockchain, and as a price-stable unit for trading and settlement.

On Penning you can, for example, swap from a volatile asset into a stablecoin like USDC or eEUR. See the supported assets if you want to know what’s available.

A stablecoin is only as stable as the reserves and issuer behind it. The peg can, in rare cases, break, and a stablecoin is not a bank deposit — it is not covered by a deposit guarantee.

Check who issues a stablecoin and whether reserve attestations are published. Also remember that gains and losses on stablecoins can be taxable in Denmark.