Which stablecoins to choose? A complete overview of popular digital assets in 2024

Stablecoins are cryptocurrency tokens whose value is pegged to real assets, most often fiat currencies like the dollar or euro. These tools serve as a bridge between traditional money and the world of decentralized finance. They have earned a special place in the crypto ecosystem due to their relative price stability and practical applications.

Why Stablecoins Are Gaining Popularity

Demand for these assets is growing every year. First, they play a critical role in the decentralized finance (DeFi) ecosystem, where they serve as collateral for lending protocols and investment platforms. Second, for citizens of developing countries with unstable local currencies, stablecoins provide access to an asset relatively protected from inflation. Third, thanks to blockchain technology, these tokens enable fast international transfers with minimal fees, bypassing traditional banking systems.

However, it is important to remember: history knows examples where stablecoins lost their peg to the underlying asset, so full security is not guaranteed.

How It Works: How Stablecoins Remain Stable

The core of any stablecoin’s operation is reserve backing. The issuer locks a certain amount of fiat currency or other assets and creates an equivalent number of tokens via blockchain smart contracts. For example, with a 1:1 ratio, each issued token is backed by one dollar in reserves. This theoretically guarantees the asset’s price and allows users to confidently exchange tokens for the underlying asset.

Market Leaders: USDT and USDC

USDT (Tether) — is the first and still one of the largest stablecoins. Launched by Tether Limited in 2014, it revolutionized the cryptocurrency market by providing users access to a digital dollar independent of any specific platform. As of September 2023, USDT is backed by assets worth over $86.3 billion with obligations around $83.2 billion. USDT is pegged to the dollar at a 1:1 ratio.

USDC (USD Coin) was created by Circle in 2018 and is managed by the Centre consortium. This stablecoin is characterized by high liquidity and is available on almost all major crypto platforms. As of 2026, the USDC market capitalization is $75.62B. USDC is also pegged to the dollar 1:1 and is compatible with the ERC-20 standard.

Alternative Fiat-Based Options

TUSD (True USD) was created by TrustToken and PrimeTrust to increase transparency in the sector. A unique feature of TUSD is that its funds are held in independent escrow accounts inaccessible to the issuer, reducing the risks of misuse. Additionally, the stablecoin publicly confirms its reserves from third parties in real time. The current TUSD market cap is $494.42M.

BUSD — a project developed jointly with a major derivatives trading platform and Paxos Trust. The token supports standards of both ecosystems and is intended for greater integration into trading protocols.

Decentralized Solutions: DAI and Innovative Models

DAI occupies a special place among stablecoins due to its fully decentralized architecture. Instead of a single issuer, DAI is issued through the Maker Protocol on the Ethereum blockchain. Users can create DAI by depositing crypto assets as collateral into special smart contracts (Maker Vaults). This scheme lacks a central controlling authority, increasing system resilience against regulatory pressure. As of now, DAI’s market cap is $4.44B.

Another innovative approach is implemented in eUSD and peUSD from Lybra Finance. These stablecoins are supported by liquidity staking tokens and, notably, generate interest income for their holders — a unique feature among similar assets.

Synthetic Dollars: Hedging Without Intermediaries

For users seeking dollar stability without interacting with traditional financial institutions, synthetic USDs exist. These instruments are created by fixing two related assets. For example, through a derivative platform, one can open a hedged position of 100 USD in Bitcoin — if Bitcoin’s price rises, offsetting losses from the hedge allows maintaining overall position stability.

What to Watch Out For: Main Risks

The reliability of any stablecoin directly depends on the financial health of its issuer and the quality of reserves. If the underlying asset loses value or the issuer faces legal or financial problems, the peg may be broken. Additionally, the regulatory framework for this sector remains insufficiently clear and evolving. Network congestion can also slow transactions and limit access to funds.

Specialized rating agencies like Bluechip publish assessments of the economic security of various stablecoins, providing data on collateral types, market value, and peg characteristics.

How to Get Started: Step-by-Step Acquisition

The easiest way to obtain stablecoins is to buy them on a centralized cryptocurrency exchange by exchanging fiat currency. Alternatively, you can swap other cryptocurrencies like Bitcoin or Ethereum for stablecoins via P2P marketplaces on decentralized exchanges. DEX platforms are especially popular among users who value absence of custodial control and the ability to maintain full control over private keys during transactions.

Final Conclusions

Stablecoins have already become an integral part of the cryptocurrency landscape and will continue to expand their influence. They fill a critical niche between traditional economy and decentralized finance, providing price stability and functionality unavailable to more volatile assets. As regulatory frameworks develop and trust in individual projects strengthens, investor and user interest in these instruments is likely to only grow.

Before investing in any stablecoin, it is essential to conduct your own research, examine the issuer’s reserves, reputation, and the specific token’s characteristics.