Stablecoin
Quick Answer
A stablecoin is a cryptocurrency pegged to a reserve asset like the US dollar (USDT, USDC, DAI). Stablecoins eliminate volatility risk in payment settlement — 100 USDC always equals ~$100.
Full Definition
A stablecoin is a cryptocurrency designed to maintain a stable value by pegging to a reserve asset, typically the US dollar. The three types are fiat-backed (USDT, USDC — reserves in bank accounts), crypto-backed (DAI — overcollateralised with crypto), and algorithmic (using supply/demand mechanics). Stablecoins are the backbone of crypto payment settlement because they eliminate price volatility — 100 USDC will always be worth approximately $100. Over $150 billion in stablecoins are in circulation globally.
Related Terms
Same-Day Settlement
Same-day settlement means merchants receive fiat in their bank account on the same day a crypto payment is made — significantly faster than card payments' 2-5 day settlement.
Sanctions Screening
Sanctions screening checks wallet addresses and entities against OFAC, EU, and UN sanctions lists to prevent prohibited transactions — a legal obligation for all payment providers.
SDK (Software Development Kit)
An SDK is a collection of pre-built code libraries that simplifies payment integration — typically a few lines of code to add crypto payment acceptance to any website or app.
Self-Custody
Self-custody means holding your own private keys with sole control over your crypto — no third party can freeze or seize funds. Core to blockchain's 'not your keys, not your crypto' principle.
Settlement
Settlement is the final, irrevocable transfer of funds completing a transaction. Crypto settlement occurs in seconds to minutes versus 1-5 business days for traditional payments.
Slippage
Slippage is the difference between expected and actual trade execution price. In crypto payments, DEX aggregators and tolerance settings minimise slippage during settlement conversion.