What is a stablecoin?
A stablecoin is a digital token, recorded on a blockchain, that is designed to keep a steady value against a currency such as the US dollar, usually by holding reserve assets equal to the tokens issued. USDC and USDT are the two most widely used dollar stablecoins. Example (round numbers): a US software firm receives 10,000 USDC on the Base network from a customer abroad, records 10,000 dollars of income that day, and converts the tokens to dollars in its account.
- A stablecoin is a blockchain token designed to hold a steady value, usually one US dollar per token.
- The GENIUS Act, signed on 18 July 2025, requires US payment stablecoin issuers to hold at least one dollar of permitted reserves for every dollar issued.
- Payment stablecoins under the GENIUS Act are not securities or commodities and are not federally insured.
- Direct redemption with the issuer is mostly for institutions; Tether's minimum is 100,000 dollars.
- The IRS treats digital assets, including stablecoins, as property, so receipts are recorded at their US dollar value.
How stablecoins work
An issuer creates tokens when a customer deposits dollars and destroys them when the customer redeems. The reserves are meant to cover every token in circulation. Holders who are not customers of the issuer buy and sell tokens through exchanges and payment providers.
In the United States the GENIUS Act of 2025 defines a payment stablecoin as a digital asset issued for payment or settlement and redeemable at a fixed amount. Issuers must be approved by a state or federal regulator, hold reserves in permitted assets such as cash, insured deposits, short-dated Treasury bills and repurchase agreements, publish redemption procedures and reserve reports, and are subject to the Bank Secrecy Act. Issuers may not pay interest to holders.
| Point | USDC | USDT |
|---|---|---|
| Issuer | Circle | Tether |
| Reserves, as published | Mostly the Circle Reserve Fund, an SEC-registered 2a-7 government money market fund; holdings disclosed weekly | Tether states its tokens are pegged one to one and backed 100% by its reserves |
| Networks | Natively issued on 38 blockchains as of 16 September 2026 | Tron, Ethereum, Solana and other listed protocols |
| Direct redemption | Through Circle Mint, for institutional customers | Minimum 100,000 dollars; fee the greater of 1,000 dollars or 0.1% |
Sources: Circle; Tether transparency; Tether fees; Tether protocols; Congressional Research Service. As published on 29 October 2026.
Where a business meets it
Customers abroad offer to pay in stablecoins, suppliers ask for them, or a platform pays out in them. Before accepting, check that your company may lawfully receive them where it is based; our guide on stablecoin rules by country sets out the position in more than 25 countries.
Common mistakes
- Sending on the wrong network. A token on one blockchain is not interchangeable with the same token on another; see wallet address.
- Treating a balance as a deposit. Payment stablecoins are not federally insured.
- Not recording the dollar value. Book each receipt at its US dollar value on the day.
- Forgetting the network fee. Transfers need the chain's own token to pay the network fee.
Related terms and how Helm handles it
Helm lets a company receive, send and convert USDC and USDT to USD inside its account, where the company may lawfully use them. See digital dollars.
Open a Helm account
USD, EUR and GBP accounts in your company's name, with a named account manager.
Open accountQuestions
What is a stablecoin in simple terms?
It is a digital token designed to be worth a fixed amount of a currency, usually one US dollar, backed by reserves held by the issuer. It moves on a blockchain rather than through banks.
Are stablecoins regulated in the United States?
Yes. The GENIUS Act, signed on 18 July 2025, requires US payment stablecoin issuers to be approved by a state or federal regulator, hold one-for-one reserves and comply with the Bank Secrecy Act.
Are stablecoins insured?
No. The GENIUS Act states that payment stablecoins are not federally insured. A stablecoin balance depends on the issuer's reserves and on where the tokens are held.
How is a stablecoin payment taxed in the US?
The IRS treats digital assets, including stablecoins, as property. A business records the US dollar fair market value of stablecoins it receives as payment.
References
- Congressional Research Service: Stablecoin legislation, an overview of the GENIUS Act of 2025 (P.L. 119-27)
- Circle: USDC
- Tether: Transparency
- Tether: Fees
- Tether: Supported protocols and integration guidelines
- IRS: Digital assets
This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.