What is a stablecoin? A practical guide to USDC, EURC and MiCA

Most crypto-assets swing in price every hour. A stablecoin is designed to do the opposite: one token should be worth one unit of a real currency today, next week and next year. That simple promise is why stablecoins now move money between exchanges, businesses and people across borders, and why EU law treats them more like electronic money than like speculative tokens.

What is a stablecoin in simple terms?

A stablecoin is a token on a blockchain whose price is tied to something outside crypto, in most cases a national currency. When you hold 100 USDC, you hold a digital claim that should be worth 100 US dollars. When you hold 100 EURC, it should be worth 100 euro.

The token lives on a public blockchain such as Ethereum or Solana. That means you can send it to any compatible wallet address at any hour, and the transfer settles on the network rather than through a chain of banks. The value, however, does not come from the blockchain. It comes from the assets the issuer holds and from your right to swap the token back for money.

How do stablecoins keep their value?

There are three main designs, and they carry very different risks.

For most people who want to hold or send dollars and euro, fiat-backed stablecoins are the relevant category. The mechanism is straightforward:

1. A business sends dollars (or euro) to the issuer.
2. The issuer creates ("mints") the same number of tokens and sends them to the business.
3. The dollars go into a reserve of cash and short-term government instruments.
4. When someone returns tokens to the issuer, the tokens are destroyed ("burned") and dollars are paid out.

Because anyone who can redeem at 1:1 profits from buying below 1.00 and redeeming, the market price tends to stay close to the peg.

How do USDC and EURC work?

USDC and EURC are both issued by Circle. According to Circle's USDC page, USDC is backed by highly liquid cash and cash-equivalent assets, and the majority of the reserve is invested in the Circle Reserve Fund, an SEC-registered government money market fund. Circle discloses reserve holdings weekly and publishes monthly third-party assurance from a Big Four accounting firm. On 14 September 2026 Circle reported 74.2 billion USDC in circulation.

EURC is the euro version. Circle states that EURC is backed 100% by euro held at regulated financial institutions in the EEA, with monthly attestations. On 14 September 2026 Circle reported 407.1 million EURC in circulation. EURC runs on fewer networks than USDC: Circle lists Avalanche, Base, Ethereum, Solana and Stellar.

One point often missed: individuals do not redeem directly with Circle. Circle Mint, the direct issuance and redemption service, is for exchanges, institutions and larger businesses. Individuals get and sell USDC through exchanges, payment apps and on-ramp and off-ramp providers, whose fees and rates then decide what you actually pay.

What does MiCA say about stablecoins?

The EU's Markets in Crypto-Assets Regulation (MiCA) sorts stablecoins into two groups:

• E-money tokens (EMTs) reference one official currency, such as the dollar or euro. USDC and EURC fall here. See e-money token.
• Asset-referenced tokens (ARTs) reference a basket of currencies, commodities or other assets.

The stablecoin rules in MiCA (Titles III and IV) apply from 30 June 2024. For e-money tokens the key points are:

• Only a credit institution or an electronic money institution may offer an EMT to the public in the EU, and it must publish a crypto-asset white paper.
• Holders have a right to redeem at any time and at par value.
• Neither the issuer nor a crypto-asset service provider may grant interest on an EMT, and MiCA counts any benefit tied to how long you hold the token as interest.

ESMA keeps an interim register of EMT issuers. In the file dated 9 September 2026, Circle Internet Financial Europe SAS appears as an electronic money institution authorised by the French Autorité de Contrôle Prudentiel et de Résolution (ACPR), with EMT white papers registered from 1 July 2024.

In January 2025 ESMA told national regulators that crypto-asset service providers should stop offering services for non-compliant stablecoins by the end of the first quarter of 2025, while "mere custody and transfer" could continue. The statement does not name individual tokens. For how this played out for USDT on EU platforms, see USDC vs USDT. For the Bulgarian side of the rules, see MiCA in Bulgaria.

What are stablecoins used for?

• Getting paid from abroad. A freelancer or company can receive dollars and hold them as USDC instead of converting straight away. See how to get paid in USD from abroad.
• Sending money across borders. A stablecoin transfer settles on the blockchain at any hour, usually for a small network fee. See sending money abroad with stablecoins.
• Holding dollars or euro outside one bank. In a self-custody wallet the tokens are under your control rather than on a platform's books.
• Moving between crypto platforms. Traders use stablecoins as a stable unit when they exit a volatile position.

xChange.bg is one example of how this fits with ordinary banking: it gives individuals and businesses EUR and USD accounts in their own name, provided together with the conversions by regulated partner Bridge (a Stripe company); incoming money becomes USDC in a wallet the customer controls, and outgoing money goes back to any bank account. You can model the costs of that kind of route with the stablecoin fee calculator.

What are the risks of stablecoins?

A stablecoin is designed to be stable, not risk-free. Before you hold a meaningful amount, weigh these points:

1. Issuer and reserve risk. The token is only as good as the reserves and the company behind them. Read the issuer's reserve reports and check its authorisation.
2. No deposit guarantee. Stablecoins are not covered by a bank deposit guarantee scheme.
3. Temporary depegging. Exchange prices can move away from 1.00 during market stress, even for well-reserved tokens.
4. Currency risk for euro users. USDC is a dollar. If you think in euro, a 5% move in EUR/USD changes the euro value of your USDC by about 5%.
5. Operational mistakes. Sending to the wrong address or the wrong blockchain network can mean losing the funds. Transfers cannot be reversed by a bank.
6. Freezes. Issuers can block tokens at an address when authorities require it. Tether's FAQ, for example, says it may seize and destroy tokens in response to demands from government or law enforcement.
7. Platform risk. If you leave stablecoins on an exchange, you also depend on that exchange's solvency and security.

How do you choose and hold a stablecoin safely?

1. Pick the currency you actually need: USDC for dollar income and costs, EURC for euro.
2. Prefer tokens whose issuer appears in ESMA's EMT register if you use EU platforms.
3. Buy and sell through a provider you can verify, such as a licensed crypto-asset service provider. See how to buy USDC in Bulgaria.
4. Decide who holds the keys: an exchange account or a self-custody wallet.
5. Test every new address with a small amount and check the network before you send the rest.
6. Keep records of each purchase, sale and exchange with dates and EUR values for your tax return. The crypto tax guide for Bulgaria explains what to declare.