THE REALITY OF STABLECOINS

The reality of Stablecoins: between innovation and risk

In a crypto ecosystem marked by volatility, stablecoins have emerged as a bridge between traditional money and the digital world. Designed to maintain a stable value, generally pegged to fiat currencies such as the dollar or the euro, these cryptocurrencies are presented as a practical solution for payments, remittances and decentralised markets. However, their rise has also sparked criticism and doubts about their transparency, sustainability and security.

How is a stablecoin created?

The process of generating a stablecoin depends on its nature and the backing mode:

• Centralised stablecoins backed by fiat

Issued by companies that hold equivalent reserves in dollars, euros or other liquid assets. Each token issued must be covered by a dollar or euro deposited in bank accounts or Treasury bonds. Examples: USDT (Tether) and USDC (Circle).

• Decentralised stablecoins backed by crypto

These work through smart contracts that lock cryptocurrencies as collateral. This is the case with DAI, managed by Maker DAO, where users deposit ETH or other tokens to issue stablecoins.

• Stablecoins backed by commodities

Linked to physical assets such as gold or oil. Example: Pax Gold (PAXG), backed by physical gold stored in vaults.

• Algorithmic stablecoins

These are not backed by real assets, but rather adjust their supply using algorithms to maintain parity. Although innovative, they have proven to be very vulnerable; the case of TerraUSD (UST) in 2022 is the most famous example of total collapse.

Requirements and regulatory framework

Issuing and maintaining a stablecoin is not a process free of obligations.

• Regulation and compliance:

Issuers must comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) policies, as well as undergo audits to ensure the existence of real reserves.

• International environment:

In the United States, the recent approval of the GENIUS Act (2025) opens the door for banks to issue stablecoins backed by secure assets.

In the European Union, the MiCA regulation (2024) establishes rules for issuance and supervision.

Hong Kong and Singapore have also approved their own regulatory frameworks, strengthening global oversight.

Risks and criticisms

Despite their advantages, stablecoins face significant challenges:

• Fraudulent projects: According to Ferrari, most projects lack real backing or sustainability.
• Dependence on centralised actors: In the case of USDT and USDC, issuers have the ability to freeze funds under court order.
• Resounding collapses: The case of TerraUSD left millions in losses and showed how vulnerable poor algorithmic design can be.
• Lack of transparency: Many issuers do not provide clear audits or periodic proof of reserves.
• Technical risks in DeFi: Bugs in smart contracts or attacks can compromise the security of funds.

The future of Stablecoins

The growth of stablecoins seems unstoppable, but with an evolution towards greater maturity.

Greater regulation in the US, Europe and Asia, with the aim of balancing innovation and security.

Institutional adoption, with banks, large retailers and fintech’s exploring their issuance or integration into their systems.

Diversification, beyond the dollar. Euros, yen and even commodity-backed stablecoins.

Stablecoins as a service (SCaaS), cwith companies offering infrastructure for third parties to create their own stablecoins.

Classification of Stablecoins

The process of creating a stablecoin depends on its backing model. The following table shows a comparative classification:

Market Capitalisation

Below is a comparison of the market capitalisation of the main stablecoins in 2025:

Conclusion

Stablecoins represent a fundamental innovation in the digital financial ecosystem, offering a stable alternative to the volatility of the crypto market. However, the associated risks, from lack of transparency to the collapse of algorithmic projects, demonstrate the urgent need for regulation and more robust models. The future of stablecoins will depend on the balance between innovation, regulatory oversight, and user confidence. If achieved, they could become the backbone of the global digital economy.

Disclaimer: The information set forth herein should not be taken as financial advice or investment recommendation. All investments and trading involve risk and it is the responsibility of each individual to do his or her due diligence before making a decision.