What a stablecoin balance is, and what it isn't

A stablecoin is a crypto-asset designed to keep a steady value against a currency, usually the US dollar or the euro. Many people use stablecoins to hold value in a currency other than their own or to move money between platforms, without the price swings of other crypto-assets.

"Stable" describes a design goal. It is not a promise. This guide explains what sits behind a stablecoin balance and what to check.

How a fiat-backed stablecoin works

The most common stablecoins are issued by a company that holds reserves, such as cash and short-term government debt, against the coins in circulation. When you buy a stablecoin from the issuer, the issuer creates new coins and adds to its reserves. When you redeem, the issuer takes the coins back and pays out currency.

The quality of a stablecoin depends on a few things:

• What the reserves are, and whether they are kept separate from the issuer's own money.
• How often reserves are reported, and whether the reports are independently examined.
• Who can redeem directly with the issuer, at what cost and how quickly.
• Which rules the issuer follows, and who supervises it.

New laws are setting standards here. In the EU, stablecoins that reference one official currency (called e-money tokens) fall under the Markets in Crypto-Assets Regulation. In the US, the GENIUS Act became law on 18 July 2025. Among other things, it requires reserves of at least one to one and monthly publication of reserve composition. The US Treasury expects the Act to take effect on 18 January 2027.

Why the price can move away from one

Most people do not buy from the issuer directly. They buy and sell on exchanges and platforms, where the price is set by supply and demand. The Bank for International Settlements explained in its Annual Economic Report of June 2025 that stablecoins trade in secondary markets at an "exchange rate" that can move away from par, much like a fund's share price can differ from the value of its assets. Stablecoins from different issuers are also claims on different companies, so their prices can differ slightly.

Most of the time the gap is very small. Under stress, for example when there are doubts about an issuer's reserves, it can widen. Issuers acknowledge this too: Circle's January 2026 overview of stablecoin payments names de-pegging as a risk to weigh.

A stablecoin balance is not a bank deposit

This is the most important point. A stablecoin balance is not a bank deposit, and deposit insurance does not apply to it unless your service terms say so. If an issuer fails, or a provider holding your coins fails, the protections are different from a bank account.

The European supervisory authorities' joint warning of October 2025 makes the same point for crypto-assets in general. Protection may be limited or absent depending on the asset, the service and the provider. They advise you to check whether the provider is authorised in the EU and to understand what you are buying.

Before you hold a stablecoin

1. Know which coin you hold. The name, the issuer and the currency it tracks.
2. Know which network it sits on. The same stablecoin can exist on several blockchains. Sending it on the wrong one can lose it.
3. Read the issuer's reserve reports. Check how often they are published and who prepares them.
4. Know how you would get back to currency. Through which provider, at what rate and fee.
5. Check where it is available. A stablecoin offered in one region may not be available to customers in another.

In NovaPayx

Your NovaPayx account shows what each balance is: a currency balance, a stablecoin, or another supported crypto-asset. When you convert, you see the rate, the fee and the asset you will receive before you confirm. Stablecoins and crypto-assets available to you depend on where you live. Services for EU/EEA customers can only be provided through a separately authorised EU provider, and the services actually available to you are shown when you apply. Some stablecoins are not available to EU customers.

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