What is a stablecoin?
And how USDC and USDT differ.
In 2026, stablecoins went from a trading tool inside crypto to a focus for regulators around the world. Why do they hold steady? Which is safer? What should you worry about with the dollars you hold on an exchange?
What is a stablecoin, and why is it stable?
A stablecoin is a crypto asset pegged to a traditional currency, usually the US dollar, aiming for 1 coin ≈ $1. It holds steady thanks to the issuer’s reserves: you hand over $1 for 1 stablecoin, the issuer keeps that dollar in cash or short-term Treasuries, and pays it back when you redeem.
On an exchange, stablecoins are the pricing currency for other coins: in BTC/USDT or ETH/USDC, the second half is the stablecoin.
USDC vs USDT: what’s the difference, and is USDC safer than USDT?
| USDT | USDC | |
|---|---|---|
| Issuer | Tether | Circle |
| Size | Largest, with the most trading pairs | Second largest |
| Reserve reporting | Publishes reserve reports regularly | Monthly third-party attestations, more transparent |
| Regulatory status | Issued outside the US | Issued by a US-licensed firm, closer to US rules |
| Best for | Trading, with the deepest liquidity | Holders who value transparency and compliance |
No stablecoin is perfectly safe. A common approach: trade with the most liquid one, and for long-term holdings split between two or three rather than betting everything on one. This page only compares stablecoins with each other; network choices and cashing out are separate topics.
Can a stablecoin depeg? What has happened before?
- May 2022, UST collapse: the algorithmic stablecoin UST had no full reserves. Once it lost its peg it fell close to zero within days, the biggest failure in stablecoin history.
- March 2023, USDC briefly depegs: Silicon Valley Bank failed while holding part of Circle’s reserves. USDC dipped to about $0.88 and recovered within days.
- Small stablecoins: those with little scale and opaque reserves are more likely to stay depegged in a liquidity crisis.
To judge a stablecoin, check three things: what the reserves are, whether a third party attests them regularly, and whether you can redeem 1:1 without trouble.
Opening a new account? Enter code OK66688 at sign-up for 20% off every trading fee, for life.
Hong Kong stablecoin licenses: who got one?
Hong Kong’s Stablecoins Ordinance took effect in August 2025. On April 10, 2026, the HKMA issued its first stablecoin issuer licenses to HSBC and Anchorpoint (a joint venture of Standard Chartered, HKT and Animoca Brands): 2 approvals out of 36 applications. The first wave focuses on Hong Kong dollar stablecoins.
Reports also say stablecoins not licensed in Hong Kong, such as USDT and USDC, are available there only to professional investors.
The US GENIUS Act: what it means for everyday users
The US stablecoin law, the GENIUS Act, was signed in July 2025. It requires licensed US issuers to hold full 1:1 reserves, disclose them monthly and not pay interest directly to holders. The implementing rules were due by July 18, 2026 but missed that deadline; the law is now expected to take effect on January 18, 2027.
For everyday users, the main effect is a clearer choice of compliant stablecoins in the US market. Whether stablecoins issued abroad can keep circulating in the US depends on later decisions.
Source: Four Pillars
What does mainland China say about stablecoins?
The People’s Bank of China and other regulators have said repeatedly that stablecoins are a form of virtual currency and that related business in mainland China is illegal financial activity. Hong Kong’s licensing regime applies only in Hong Kong and doesn’t signal any opening on the mainland.
Wherever you live, stay away from offers to swap currency for strangers with stablecoins or to accept coins from unknown sources. Those can tie you to money laundering, however good the payout looks.
Stablecoin
FAQ.
01Can you make money with stablecoins?
A stablecoin’s price doesn’t move up or down; its job is to hold value and make trading easier. Any yield comes from earn products and similar, which carry their own risks.
02Can I swap USDC for USDT?
Yes. OKX spot has a USDC/USDT pair, or you can use Convert. The rate is usually very close to 1:1.
03Can a stablecoin go to zero?
Large stablecoins with full reserves and smooth redemption are very unlikely to, but it isn’t impossible. Algorithmic stablecoins and small ones with opaque reserves are far riskier.
04Can anyone buy a Hong Kong dollar stablecoin?
Licensed HKD stablecoins are aimed at the Hong Kong market. Who can buy them and where depends on the issuer and Hong Kong rules.
05What is an offshore yuan stablecoin?
Offshore renminbi stablecoins are issued by institutions outside the mainland and have nothing to do with mainland regulators. Mainland residents should be aware of the legal risk.
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