What are stablecoins?

Stablecoins and their reference value

A stablecoin is a crypto-asset designed to follow the value of something else, often a currency such as the US dollar. A token intended to follow one dollar can be sent between compatible digital wallets and used in a crypto trade. Its market price can still move away from one dollar. The name describes the aim, not a guaranteed result.

How a stablecoin holds its value

For a reserve-backed, currency-linked token, the issuer's reserve and redemption terms matter. A customer who has the right to redeem can return tokens to the issuer under those terms. This can help keep the trading price near the reference value, but access to redemption and the reserve's quality vary by token. The Bank for International Settlements¹ describes stablecoins as issued by a central entity even when they circulate on public blockchains.

Other designs try to influence the price by changing token supply through software rules. They do not work like a claim supported by a full reserve. In either design, a quoted reference value and the price available on a trading venue can differ.

How stablecoins are used

Stablecoins are used to move value between wallets and as a trading pair on crypto platforms. Some payment arrangements also use them, where the recipient accepts the token and the network supports it. A token can use Ethereum's ERC-20 standard², with Ether used to pay that network's transaction fees³. A transfer's cost, speed and reversibility depend on the network and service. They are not the same as a bank deposit.

Common stablecoin designs and EU categories

Design	Intended reference	What supports the link	EU category
Single-currency token	One official currency, such as the US dollar	Issuer reserves and redemption rights under its terms	Generally an e-money token (EMT)
Asset-referenced token	Another value or a combination of values	Reserve assets and rights defined by the issuer	Asset-referenced token (ART)
Algorithmic design	A stated reference value	Rules that change supply; a full reserve may be absent	Classification depends on its rights and design

EU rules for stablecoins

MiCA⁴ sets out EU rules for e-money tokens and asset-referenced tokens; those provisions began applying on 30 June 2024. They cover issuers and obligations tied to the token's category. The European Banking Authority⁵ explains the two categories and its role concerning significant issuers. A token's actual rights still depend on its terms. The cryptocurrency introduction explains the wider category of crypto-assets.

The GENIUS Act in the US

The GENIUS Act⁶, short for Guiding and Establishing National Innovation for U.S. Stablecoins Act, became US Public Law 119-27 on 18 July 2025. It concerns payment stablecoins in the United States. It is a US law, separate from the EU's MiCA framework. The existence of either framework does not make every stablecoin maintain its intended value.

What does a stablecoin index ETP hold?

Virtune Stablecoin Index ETP is a listed security linked to an index of crypto-assets involved in stablecoin issuance, management and infrastructure. The index is rebalanced quarterly⁷. The ETP does not hold stablecoins or seek to follow a dollar's value; its assets can rise or fall with the crypto market. The investor owns the security, not the index constituents in a wallet.

Ethereum is used by stablecoins such as USDT, USDC and PYUSD, as documented in a BIS study of 2025 transactions⁸. This network role explains Ether's inclusion among the index assets at the 25 September 2026 holdings update. The product page shows current holdings, which can change when the index rebalances. More stablecoin activity alone does not predict a higher ETP price. The ETP explainer describes the security structure.

Stablecoin risks

A stablecoin can trade below its reference value if confidence in its issuer, reserve or redemption rights weakens. A user can also lose access through a wallet-key error, a wrong transfer or a service failure. European supervisory authorities⁹ warn about crypto-asset risks and limited protections. An index ETP has different risks and costs: its price follows volatile crypto-assets rather than a currency, and the holder also depends on the product's issuer and custody arrangements.