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Blockchain

June 24, 2025

Stablecoins explained: An FAQ on these digital assets

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Jennifer Lorentz

Senior Managing Counsel,

Regulatory, Mastercard

If you’re unwilling to take a ride on the roller coaster of volatile crypto assets like Bitcoin or Ether, stablecoins might be more your speed. As their name suggests, stablecoins are a type of digital asset built to maintain a stable value and serve as a bridge or “on-ramp” between traditional fiat and crypto assets. Stablecoins could come to play a significant role in the future of digital commerce. 

With the promise of enabling instant transactions, increased efficiency, and reduced costs, especially for cross-border payments, stablecoins may power a new wave of digitalization of financial services, including micropayments, payroll, escrow, overseas remittances and foreign exchange trading. 

 

stable

/ˈstābəl/ • adjective

  1. ot likely to give way or overturn; firmly fixed, steadfast.
  2. not changing or fluctuating; unvarying.

 

If you’re unwilling to take a ride on the roller coaster of volatile crypto assets like Bitcoin or Ether, stablecoins might be more your speed. As their name suggests, stablecoins are a type of digital asset built to maintain a stable value and serve as a bridge or “on-ramp” between traditional fiat and crypto assets. Stablecoins could come to play a significant role in the future of digital commerce. 

With the promise of enabling instant transactions, increased efficiency, and reduced costs, especially for cross-border payments, stablecoins may power a new wave of digitalization of financial services, including micropayments, payroll, escrow, overseas remittances and foreign exchange trading. 

What is a stablecoin?

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So how are stablecoins different from other digital assets?

Stablecoins just sound like the digital money I already use in my banking app. What’s the difference?

How do stablecoins work?

Can a stablecoin be pegged to other assets?

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So … are stablecoins actually stable?

Stablecoins explained: A primer on these digital assets

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Stablecoins explained: A primer on these digital assets

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Stablecoins explained: A primer on these digital assets

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Stablecoins explained: A primer on these digital assets

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Stablecoins explained: A primer on these digital assets

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