This content is for educational purposes only and is not financial advice. bunq doesn't give trading advice. Always do your own research or consult a qualified financial advisor before making any investment decisions. Cryptocurrency investments come with risks, including the potential loss of the principal invested. Prices can fluctuate significantly. bunq Crypto is powered by our partner Kraken.

A stablecoin is a cryptocurrency designed to hold a steady value, usually pegged to a fiat currency like the US dollar or euro. Traders use them to move money on-chain without the sharp price swings common in Bitcoin or altcoins.

How stablecoins stay pegged

Different designs keep the price near $1 (or another target):

Fiat-backed. Reserves of real currency or equivalents held in custody for each token issued.

Crypto-backed. Locked collateral on-chain, often over-collateralized to absorb volatility.

Algorithmic. Supply adjusts through rules or incentives. These have failed in the past when confidence collapsed, higher risk than fully backed models.

Why people use stablecoins

Stablecoins bridge traditional money and crypto markets: park funds between trades, send cross-border transfers quickly, or interact with DeFi without exiting to a bank. They're not risk-free, reserves, regulation, and issuer solvency all matter.

Stablecoins and bunq

bunq lets you buy and sell major cryptocurrencies in euros through bunq Crypto. For everyday stability, your Bank Account and Savings Account hold euros with deposit protection, without crypto volatility.

Frequently asked questions

Is a stablecoin the same as cash?

No. Stablecoins are digital assets on a blockchain. Bank deposits are regulated and covered by deposit guarantee schemes, different protections apply.

Can stablecoins lose their peg?

Yes, if reserves are questioned or markets panic. Major fiat-backed coins have de-pegged briefly during stress before recovering, but failures do happen.

Are stablecoins good for beginners?

They reduce price volatility but introduce issuer and regulatory risk. Beginners often start with small amounts of major coins or euros in savings before exploring stablecoins on DeFi platforms.