This glossary explains the words and metrics you meet when reading about stablecoins. It covers terms like peg, reserves, depeg, quote asset, and yield, in plain language. Each entry gives the short meaning. Where a word has a deeper mechanism, it points to the guide that owns the full story.
The terms fall into a few families. Some define the coin. Others name what backs it, how you check that backing, how the coin moves, how it can fail, and how it fits into markets and money. Knowing a word's family is half of understanding it. A definition here is a starting point, not the whole story, and the linked guide always owns the mechanism.
Start with the words that define the coin itself, then work outward to backing, checking, transfer, risk, and markets.
The words that define a stablecoin
These are the core terms. Every other stablecoin idea builds on them. A stablecoin is a crypto token that aims to hold a steady value. Its peg is the value it tracks, almost always a dollar. Its backing is what the issuer holds so the coin is worth that peg. Get these, and the rest follow.
| Term | What it means |
|---|---|
| Stablecoin | A crypto token built to hold a steady value, almost always about one US dollar |
| Peg | The reference value a coin aims to track, usually one dollar |
| Backing | The assets an issuer holds so each coin is worth its peg |
| Reserves | The pool of backing assets, such as cash and short-term government debt |
| Redemption | Swapping a coin back with the issuer for the money behind it |
| At par | Worth exactly one unit of the peg, so one coin equals one dollar |
| Issuer | The company or protocol that creates the coin and holds the backing |
The Bank of England puts the core idea plainly. The issuer holds the same value in real money, and the holder can swap the coin back whenever they want (source: Bank of England stablecoin explainer). The peg then holds mostly through arbitrage. Traders buy the coin when it dips below a dollar and sell when it rises, which nudges the price back (source: Federal Reserve note on the stable in stablecoins).
Two guides go deeper here. What a stablecoin is covers the ground floor. How stablecoins maintain their price explains how the peg is actually held.
Words for what backs a coin
Stablecoins differ most in what stands behind them. These terms name the main designs. Fiat-backed coins hold cash and government debt. Crypto-backed coins hold other crypto with a cushion. Algorithmic coins hold little or nothing and lean on code. The backing is the fastest way to judge a coin.
| Term | What it means |
|---|---|
| Fiat-backed | Backed by cash and short-term government debt held by a company |
| Crypto-backed | Backed by other crypto locked as collateral, with extra cushion |
| Algorithmic | Backed by little or no reserve; code adjusts supply to hold the peg |
| Over-collateralization | Locking up more value than the coins issued, as a buffer against a fall |
| Synthetic, delta-neutral | Backed by a hedged trading position rather than plain cash |
| Yield-bearing token | A token that passes through interest, closer to a fund than a payment coin |
| Commodity-backed | Backed by a physical asset such as gold, rather than a currency |
The design you pick decides the main risk you take. Cash-backed coins ask you to trust a company. Crypto-backed coins can fall if the collateral falls. Algorithmic coins can unravel if confidence drops. Each family has its own guide.
The overview lives in the main types of stablecoins. The largest family has its own page on fiat-backed stablecoins.
The two harder designs each have a guide too. See crypto-backed stablecoins for the collateral model, and algorithmic stablecoins for the code-driven one.
Terms for checking the backing
A coin is only as good as the evidence behind it. These words describe that evidence. An attestation is a point-in-time check that reserves exist. An audit is a deeper look at a company's finances. Proof of reserves is a separate idea that applies to exchanges, not issuers. Telling them apart matters.
| Term | What it means |
|---|---|
| Attestation | A point-in-time check by an accounting firm that reserves exist, not a full audit |
| Audit | A deeper examination of a company's financial statements over a period |
| Assurance | An accountant's report giving a level of confidence in a stated fact |
| Point-in-time | A snapshot at one moment, which is what an attestation gives, not an ongoing guarantee |
| Proof of reserves | An exchange showing it holds the coins it owes users, a different layer from issuer backing |
| Segregation | Keeping reserves separate from the issuer's own money |
| Transparency report | A regular published breakdown of what backs a coin |
Circle offers a clear example. It publishes regular reports on what backs USDC, held mostly as cash and short-term US Treasuries, with third-party assurance on the reserves (source: Circle transparency disclosures). Reading one such report is the best habit for judging a fiat-backed coin. An attestation is not the same as a full audit, so it helps to know which one you are looking at.
How reserve evidence works, and where it stops, is the job of stablecoin reserves and attestations. The separate exchange-level check is covered in proof of reserves explained, which is a different thing from a coin's own backing.
Terms for moving a stablecoin
Once you hold a coin, a second set of words describes how it moves. It moves between the issuer and the market, between bank money and crypto, and across networks. Mint and burn create and remove coins. Primary and secondary markets are where they change hands. The network is the chain a coin rides on.
| Term | What it means |
|---|---|
| Mint / burn | Creating new coins (mint) or removing them (burn) to match the backing |
| Primary market | Where a small set of firms mint and redeem directly with the issuer |
| Secondary market | The exchanges where everyone else buys and sells the coin |
| On-ramp / off-ramp | Moving between bank money and stablecoins |
| Network, or chain | The blockchain a coin runs on; the same coin can live on several |
| Native vs bridged | A coin issued directly on a chain, versus a wrapped version moved across a bridge |
| Confirmation | A network's sign that a transfer has been recorded and is settling |
| Address | The destination string a transfer is sent to on a network |
| Memo or tag | An extra label some networks need to credit a transfer correctly |
| Gas fee | The network's own fee to process a transfer, paid in the chain's coin |
Fiat-backed issuers tend to mint and burn only with big institutional customers. That is why retail traders rely on secondary markets to get the coin (source: Federal Reserve note on primary and secondary markets for stablecoins). The price you see is a market price, not the issuer's. The tradeoffs between the two paths are covered in primary vs secondary stablecoin redemption, and the ways redemption itself can fail or stall are covered in stablecoin redemption risk.
Moving a coin across chains is covered in stablecoin transfers across networks. The two paths between bank money and crypto sit in on-ramps and off-ramps.
Two more guides handle the fine print. The costliest mix-up, confusing a directly issued coin with a wrapped one, is covered in bridged versus native stablecoins. What a transfer actually costs is in stablecoin fees and settlement time.
Terms for when a stablecoin goes wrong
Stability is a goal, not a promise. These words name the ways a coin can slip. A depeg is the price leaving its peg. A freeze is an issuer blocking an address. Issuer risk is the chance the company itself fails. Learning the failure words helps you read a warning early.
| Term | What it means |
|---|---|
| Depeg | When the coin's price drifts away from its peg |
| Break the buck | A money-fund term for a stable value slipping below a dollar |
| Run | A rush by holders to redeem at once, which can break a weak coin |
| Death spiral | A feedback loop where a falling coin and its paired token drag each other down |
| Reserve risk | The chance the backing is not fully there |
| Issuer risk | The chance the company behind the coin fails or freezes redemptions |
| Freeze / blacklist | An issuer blocking a specific address from moving the coin |
| Admin key | The control that lets an issuer or protocol change, pause, or freeze the coin |
| Censorship resistance | Whether a coin can be blocked; most fiat-backed coins are not censorship-proof |
| Traceability | How visible your transfers are on a public ledger |
Most of these risks stack on top of each other. A run can expose a reserve gap. A reserve gap can cause a depeg. A worried issuer can freeze funds. Each has a home guide.
The term break the buck is borrowed from money market funds. A US investor education site describes it as a fund's steady value slipping below a dollar, a rare event that fund rules try to prevent (source: SEC Investor.gov on money market funds). A stablecoin losing its peg is the crypto version of the same worry.
The whole map of what can go wrong sits in the stablecoin risk guide. The way a price actually breaks is covered in depeg risk, and what happens when the company itself is the risk is covered in stablecoin issuer risk.
The control terms have their own pages too. Freeze powers and admin keys are in freeze and admin-key risk. Where your transfers show up on a public ledger is covered in stablecoin privacy tradeoffs.
Terms for stablecoins in markets and money
The last family places a stablecoin among trading, yield, and real money. A quote asset is the unit a market prices in. Yield is a return the coin itself never pays. A payment stablecoin is a regulator's term with rules attached. These words connect a coin to the wider financial world.
| Term | What it means |
|---|---|
| Quote asset | The unit a market prices trades in, often a dollar stablecoin |
| Settlement | Using the coin to hold value between trades |
| Store of value | Holding a coin to keep steady dollar value, rather than to spend it |
| Denomination | The unit an amount is priced in, such as a dollar stablecoin |
| Yield | A return earned by putting a coin to work, never paid by a payment coin itself |
| Market cap | The total value of all coins of one stablecoin in circulation |
| Payment stablecoin | A regulator's term for a coin used to pay, barred from paying holders yield |
| CBDC | A central bank's own digital money, not a private stablecoin |
| Legal tender | Government money that must be accepted; a stablecoin is not this |
| E-money token, or ART | European Union terms for stablecoin categories under the MiCA rules |
Two of these carry legal weight. Under the United States GENIUS Act, signed in 2025 but not yet in force, a permitted payment stablecoin issuer will be barred from paying holders any interest or yield just for holding the coin (source: GENIUS Act, Public Law 119-27). Market cap is only a size measure. The total stablecoin market was worth more than $300 billion in mid-2026 (source: DefiLlama stablecoin data).
From BloFin's operational view, the words in this last group are the ones traders lean on daily. USDT and USDC are the default quote and settlement units on the platform, so peg, depeg, and reserves are the terms worth knowing cold. Together they decide whether the dollar you are holding stays a dollar.
Why a coin serves as the cash unit of crypto is covered in stablecoins as quote assets. Where a return comes from, and the risk it carries, is in stablecoin yield sources and risks.
To see how a coin lines up against real money, compare it with fiat money. For the state-issued version of digital money, see central bank digital currencies.
Terms you meet in reserve reports and rules
When you read a coin's own paperwork, a reserve report or a rulebook, a few more terms appear. They describe what the reserves hold, when they were checked, and who may redeem directly. These are the words that turn a transparency report from a wall of jargon into something you can read and judge.
| Term | What it means |
|---|---|
| High-quality liquid assets | Safe, easy-to-sell assets a coin may be required to hold as reserves |
| Treasury bills | Short-term US government debt, a common reserve asset |
| Reserve composition | The published breakdown of what a coin's reserves actually hold |
| Reporting period | The date or span that an attestation or report covers |
| Peg deviation | How far a coin's price has moved from its peg, a number reports track |
| Redemption terms | An issuer's rules for swapping coins back, such as minimums or fees |
| Authorized participant | A firm approved to mint and redeem directly with the issuer |
These terms decide whether a report tells you anything useful. Reserve composition and the reporting period tell you what was checked, and when. Redemption terms tell you how easily you could actually get your money out, since some issuers set minimums or fees. Authorized participant explains why the coin's paperwork often reads as if written for firms, not for you.
Reading that paperwork well is a skill of its own. It is walked through step by step in how to read a stablecoin reserve report, which turns these terms into a checklist you can run against any coin.
Frequently asked questions
Is "stablecoin" an official or legal term?
Not exactly. "Stablecoin" is the everyday word, but regulators use narrower, defined terms. In the United States the law speaks of a "payment stablecoin." In the European Union the rules split these coins into "e-money tokens" and "asset-referenced tokens." Those legal terms carry specific requirements that the plain word does not. So when a rule or a report uses one of them, it points at a defined category, not just any dollar token. That is worth noticing when you read official material.
Why does this glossary point to other guides instead of explaining each term fully?
Because each term has a home. A glossary works best as a fast index: a short meaning, then a link to the guide that owns the full mechanism. Explaining every term in depth here would just rebuild those guides and bury the quick lookup you came for. So an entry gives you enough to keep reading, and the linked guide is there when you want the how and the why. Use this page as a map, not a manual.
Which terms should a beginner learn first?
A small core carries most of the weight. If you understand peg, backing, redemption, and depeg, you can follow almost any beginner article, because the rest tend to hang off those four. Transfer words like network and gas fee matter once you start moving coins. Market and legal words like quote asset or payment stablecoin can wait until you trade or read a rule. Learn the core first, and pick up the others as you meet them.
If a guide and this glossary word a term slightly differently, which should I trust?
Trust the guide this glossary links to for that term. The glossary is the short version, written to be quick, so it trims nuance on purpose. The owning guide is the fuller source, kept closer to the mechanism and any rules around it. If the two ever seem to clash, it is almost always because the glossary simplified, not because the guide is wrong. When it matters to a real decision, follow the link and read the longer explanation.
Do these terms mean the same thing in every country?
Some do, some do not. The mechanical words, like peg, mint, or depeg, travel well, because they describe how the technology works. The legal and money terms do not. "Legal tender," "e-money," and "payment stablecoin" are defined differently, or not at all, from one place to the next. A coin that counts as a regulated e-money token in one country may have no defined status in another. When a term has legal weight, check what it means where you live.
What if a term I need is not in this glossary?
Start at the hub. This page covers the words that come up most across the stablecoin topic. Each concept has a fuller guide behind it, and the main stablecoin guide is the natural place to branch out from. If a word is really about trading, payments, or investing in general, it usually belongs to one of those areas rather than to stablecoins in particular. Following the linked guide for the closest term will normally get you to the right explanation.
Researched and written by the BloFin Academy editorial team with AI-assisted drafting. Updated July 2026. Primary sources: the Bank of England, the US Federal Reserve, Circle, the GENIUS Act (Public Law 119-27), and DefiLlama. All facts independently verified against cited documentation current as of July 2026.
This article is educational and general in nature, not financial, investment, tax, or legal advice, and it defines terms rather than recommending any coin or action. Stablecoins are private tokens, not bank deposits and not legal tender, and they are not protected by FDIC or any government insurance. Stablecoins carry real risks, including loss of the peg, issuer failure, and frozen funds, and their value is not guaranteed. Definitions here are simplified starting points; check the linked guides and the laws where you live before making financial decisions. BloFin does not provide investment advice.