Top Stablecoins in 2025: Types, Risks and Use Cases

Stablecoins have become the backbone of the crypto market. Pegged to the US dollar, gold or baskets of assets, they help traders, companies and protocols move value across centralized exchanges, DeFi and payment networks without constantly fighting price swings. Volume, liquidity and settlements in the digital asset space increasingly flow through stablecoins.

Important: this information is not intended for users in the EEA whenever it refers to stablecoins that do not comply with the MiCA (Markets in Crypto-Assets) regulation. Users in the EEA are strongly advised to use only MiCA-compliant stablecoins, such as USDC, on regulated platforms.

• What stablecoins are and why they matter
• How stablecoins work and stabilization models
• Top stablecoins by market presence in 2025
• How to choose a stablecoin for your strategy
• Key risks and safety practices
• Stablecoin FAQ
• Conclusion

What stablecoins are and why they matter

Stablecoins are digital tokens designed to keep their price as close as possible to a reference value — most often 1 USD. In practice they act as a medium of exchange, a unit of account and, in relative terms, a temporary store of value when markets move fast.

In the broader crypto economy, stablecoins are used to:

• Trade efficiently. Most spot and derivatives markets are quoted against stablecoins, making it easy to move between assets without passing through fiat rails each time.

• Measure P&L. Profits, losses and portfolio value are frequently denominated in stablecoins rather than in volatile coins.

• Settle and pay. Businesses rely on stablecoins for near-instant cross-border settlements and operational payments to partners or freelancers.

• Bridge TradFi and DeFi. Stablecoins serve as the common denominator between traditional finance and blockchain, enabling on-chain lending, liquidity provision and payments with a familiar “dollar-like” unit.

This combination — blockchain speed with relatively stable pricing — is what makes stablecoins so central to both centralized and decentralized crypto infrastructure.

How stablecoins work and stabilization models

Not all stablecoins are built the same way. The peg can be maintained through bank-held reserves, on-chain collateral, algorithmic adjustments or a mix of several mechanisms. The main categories are:

• Fiat-backed stablecoins. Tokens are backed by cash and liquid assets held with banks or regulated custodians. The issuer promises 1:1 redemption against fiat. Examples inсlude USDT, USDC, PYUSD and TUSD.

• Crypto-collateralized stablecoins. Users lock over-collateralized crypto assets in smart contracts and mint stablecoins against that collateral. DAI is the most prominent example.

• Algorithmic and hybrid models. These designs use a mix of partial reserves, supply expansions and contractions and market incentives, rather than full backing alone. FRAX and AMPL fall into this bucket.

• Commodity-backed tokens. Tokens like PAXG track the price of physical gold instead of fiat currency, offering a form of tokenized commodity exposure.

For each stablecoin, reliability depends on the quality and transparency of reserves, the robustness of smart contracts, the governance process and real market demand. Assets with clear disclosures and significant market capitalization tend to provide more predictable stability and deeper liquidity on exchanges and within DeFi.

Top stablecoins by market presence in 2025

Market capitalization and trading volume highlight which stablecoins are most widely used in centralized exchanges, payment networks and DeFi protocols. Still, size alone is not enough: it must be considered together with collateral quality, governance and regulatory alignment. Below is an overview of the major stablecoins commonly referenced in 2025.

1. Tether (USDT)

Tether (USDT) is the largest stablecoin by market cap and one of the most actively traded crypto assets worldwide. Its target is to stay as close as possible to 1 USD, backed by a mix of cash, cash equivalents and short-term financial instruments.

USDT exists on most major blockchains, from smart-contract networks to payment-focused chains, which places it at the centre of global crypto liquidity. It is used extensively as a base asset for spot markets, as collateral in derivatives, for remittances and for moving value across chains and platforms.

When assessing USDT, market participants pay close attention to the composition of reserves, the frequency and depth of reporting and the quality of counterparties. Its liquidity is a major advantage, but transparency and regulatory risk remain important aspects of due diligence.

2. USD Coin (USDC)

USD Coin (USDC) is a fiat-backed stablecoin issued by regulated financial institutions, designed to maintain a 1:1 peg to the US dollar. Issuers publish regular attestation reports from independent firms, confirming that circulating tokens are backed by cash and short-term US Treasuries.

This focus on transparency and regulatory alignment has made USDC a preferred option for compliant platforms and institutional desks. Under frameworks such as MiCA, many market participants in the EEA may prioritize assets with clear legal status and audited reserves, and USDC often fits that profile.

USDC is integrated across centralized exchanges, major DeFi platforms and payment rails, offering robust liquidity and predictable settlement.

3. PayPal USD (PYUSD)

PayPal USD (PYUSD) is a fiat-backed stablecoin issued in cooperation with a regulated trust. It is designed to make value transfer seamless between the traditional payments ecosystem and blockchain networks, allowing users to move balances within a large payment platform and into supported on-chain environments.

PYUSD emphasizes compliance and transparent reserves, with regular attestations. Thanks to an existing global user base and merchant integrations, its relevance for retail-scale payments and cross-border commerce may grow as it becomes available in more Web3 wallets and exchanges.

4. TrueUSD (TUSD)

TrueUSD (TUSD) is a dollar-pegged stablecoin backed by reserves held across multiple regulated financial institutions. One of its core features is frequent third-party verification of reserve balances, enabling users to check independently whether token supply matches underlying dollars.

TUSD is available on many exchanges and in DeFi, often used in spot and derivatives markets. While it does not match the global volume of USDT or USDC, its emphasis on reserve transparency keeps it on the radar of users who prioritize clarity around collateral.

5. DAI (DAI)

DAI is the flagship crypto-collateralized stablecoin of the MakerDAO ecosystem. Instead of relying on bank deposits, DAI is minted when users lock collateral such as ETH and tokenized stablecoins into Maker smart contracts and take out on-chain “debt” denominated in DAI.

Stability is maintained through protocol parameters and decentralized governance decisions: collateral ratios, stability fees and risk limits are adjusted in response to market conditions. DAI has become deeply embedded in DeFi as a decentralized alternative to fiat-backed stablecoins. The main risk driver is the quality and volatility of the underlying collateral, along with the resilience of the protocol itself.

6. Ripple USD (RLUSD)

Ripple USD (RLUSD) is a dollar-pegged stablecoin within the Ripple ecosystem, aimed at institutional-grade payments, remittances and liquidity flows. It is designed to complement existing cross-border payment solutions, offering fast and low-cost settlement while staying interoperable with banking and payment networks.

RLUSD’s long-term relevance will depend on how widely it is adopted by financial institutions and how quickly it gains liquidity on exchanges and DeFi platforms. For users who focus on enterprise and banking integrations, RLUSD is a project to watch.

7. sUSD (sUSD)

sUSD is a synthetic stablecoin issued by the Synthetix protocol. Instead of being backed by cash reserves, it is collateralized primarily by SNX — the protocol’s native token — and, depending on configuration, additional assets. Users lock collateral, assume a share of protocol debt and mint sUSD.

The systеm relies on over-collateralization and governance-driven parameter changes to keep sUSD near its target value. Its main use cases lie within DeFi: trading synthetic assets, providing liquidity and accessing derivatives markets. sUSD is best suited for advanced users who understand how collateralized debt positions and protocol incentives work.

8. Ampleforth (AMPL)

Ampleforth (AMPL) is not a conventional stablecoin but an elastic-supply asset governed by an algorithmic monetary policy. Instead of holding reserves, the protocol periodically adjusts token balances in users’ wallets, expanding or contracting supply when the market price deviates from a target index.

The goal is to achieve long-run price stability via supply changes rather than direct collateral backing. In practice, AMPL can exhibit significant short-term volatility, which is why it is often used in experimental monetary designs and DeFi research rather than as a simple stable-value token.

9. Frax (FRAX)

Frax (FRAX) is a hybrid stablecoin combining collateral backing with algorithmic elements. Over time, the project has placed increasing emphasis on stronger collateralization and liquidity depth in order to support a more robust peg to the dollar.

The Frax ecosystem includes liquidity products and on-chain monetary policy tools. FRAX tends to appeal to users who are comfortable with decentralized, actively developed systems and who are willing to understand a more complex stability mechanism.

10. Pax Gold (PAXG)

Pax Gold (PAXG) is a commodity-backed token representing ownership of physical gold held in professional vaults. Each token corresponds to a specific amount of fine gold, making PAXG functionally closer to tokenized bullion than to a dollar-pegged stablecoin.

PAXG appears in some “stablecoin” lists because it offers relative stability against the gold market instead of fiat. It is used for wealth preservation, hedging and long-term exposure to gold in tokenized form, with liquidity depending on the specific exchange or platform.

How to choose a stablecoin for your strategy

Even a detailed list of stablecoins ranked by market cap will not automatically reveal which one is “best”. The right choice depends on what you want to achieve: trading, saving, yield generation, payments or DeFi participation.

Key factors to consider inсlude:

• Collateral type. Fiat reserves, crypto collateral, commodities or hybrid models each come with different trade-offs.

• Transparency and audits. Frequency and quality of reserve attestations, identity of custodians and clarity of redemption terms.

• Regulatory alignment. Under regimes such as MiCA, many professional users will prefer assets with clear reporting and supervision frameworks.

• Liquidity and integrations. Depth of order books on major exchanges, presence in DeFi lending and liquidity pools and support in payment rails.

• Governance and risk management. Whether the asset is controlled by a centralized issuer or a DAO, how decisions are made and how the systеm handles stress events.

Active traders typically prioritize liquidity and exchange support. DeFi users additionally evaluate smart-contract risk and protocol design, while businesses care about compliance, accounting treatment and operational reliability.

Key risks and safety practices

Stablecoins are often seen as the “safe corner” of crypto markets, but they carry their own set of risks. Among the most important are:

• Depeg risk. In extreme conditions, the market price can diverge from the 1 USD target for extended periods.

• Credit and counterparty risk. For fiat-backed coins, this relates to the quality of the banks and custodians holding reserves and the possibility of asset freezes.

• Smart-contract and protocol risk. For crypto-collateralized and synthetic stablecoins, code vulnerabilities, oracle failures or poorly calibrated parameters can cause instability.

• Regulatory risk. New laws can impose restrictions or reporting requirements that affect how certain stablecoins can be used in specific regions.

• Operational risk. Exchange hacks, wallet compromises, user mistakes in sending funds and the general risk of keeping large balances on centralized platforms.

Practical safety measures inсlude diversifying across several well-researched stablecoins, self-custody for significant balances, using reputable exchanges and DeFi protocols only, and being skeptical of unsustainably high yields advertised on little-known platforms.

Stablecoin FAQ

By market capitalization and usage, the “top five” stablecoins are most often USDT, USDC, PYUSD, TUSD and DAI.
USDT leads in trading volume and number of pairs, USDC is associated with audited reserves and stronger regulatory focus, PYUSD leverages integration into a major payments ecosystem, TUSD emphasizes real-time or frequent reserve attestations, and DAI provides a decentralized, crypto-collateralized alternative. Their exact ranking can shift over time as liquidity, regulation and market sentiment evolve.

There is no universally safest stablecoin. Each design comes with its own risk profile: fiat-backed coins depend on banking partners and regulation; crypto-collateralized coins depend on collateral quality and protocol resilience; hybrid and algorithmic models depend on complex on-chain economics. For many users, a diversified approach — holding several well-researched stablecoins and monitoring their disclosures and track records — is more robust than relying on a single asset.

The number of stablecoins is constantly changing. There are dozens of actively used assets and many more experimental or niche tokens. However, only a limited set of stablecoins achieve meaningful scale in terms of market cap, liquidity and integrations with exchanges, payment processors and DeFi protocols. When choosing a stablecoin, it is more important to focus on quality than on sheer variety.

Stablecoins themselves are not designed to appreciate against their peg, but they can be deployed in yield-generating strategies: lending markets, liquidity pools, structured products and more. Every additional percentage of yield, however, comes with added risk — whether technical, market-related or regulatory. Never assume that a high rate on a little-known platform is “risk-free”, and avoid committing funds you cannot afford to lose.

A bank account is part of the traditional financial systеm with deposit insurance or other safeguards depending on the jurisdiction, but cross-border transfers can be slow and expensive. Stablecoins are blockchain-based tokens that can move across borders in minutes or seconds and integrate seamlessly with crypto trading and DeFi. In return, they generally do not offer the same guarantees as insured bank deposits. The choice between them depends on your use case, risk tolerance and regulatory environment.

Conclusion

Stablecoins have evolved into a central building block of the digital asset ecosystem. They make it possible to trade, lend, borrow and pay in a familiar “dollar-denominated” unit while benefiting from blockchain-level speed and transparency.

The leading stablecoins of 2025 cover a wide spectrum of designs: fiat-backed options like USDT, USDC, PYUSD and TUSD; decentralized and synthetic solutions such as DAI, sUSD and FRAX; and commodity-linked tokens like PAXG, plus experimental elastic-supply assets such as AMPL. Understanding how each of them maintains its value — and which risks it takes on in the process — is essential for using them responsibly.

Before integrating a stablecoin into your portfolio or payment flows, review its documentation, reserve reports, governance model and historical performance during market stress. Doing so will help you use stablecoins as a flexible tool for trading, liquidity management and payments, without losing sight of the underlying risk profile.

Disclaimer: this article is for informational purposes only and does not constitute investment, legal or tax advice. Always conduct your own research and consider the regulations that apply in your jurisdiction before making financial decisions.