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 large is the stablecoin market?

The combined market value of stablecoins in circulation exceeded USD 280 billion in November 2025, roughly 8% of the crypto-asset market, according to the European Central Bank (ECB).

Stablecoin market shares in the ECB's November 2025 review

Stablecoin	Share of market value	Period
Tether (USDT)	63%	November 2025
USD Coin (USDC)	26%	November 2025

Dollar-linked stablecoins made up around 99% of circulating supply in November 2025; euro-denominated stablecoins totalled around EUR 395 million in the same review. Clearer rules may have contributed to demand, in the ECB's assessment.

How a stablecoin holds its value

For a reserve-backed, currency-linked token, the issuer holds assets to meet requests for repayment. A customer entitled to redeem can return tokens and receive the reference currency under the issuer's terms. The ability to exchange tokens for the reference currency helps support the intended value. Redemption access and reserve quality vary by token. An issuer creates these stablecoins even when they circulate on a public blockchain.

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 let a trader sell a crypto-asset for a currency-linked token and use that token for another trade without first moving money through a bank account. They also serve as payment assets in some cross-border transfers and tokenised-asset transactions. A token can use Ethereum's ERC-20 standard, with Ether used to pay that network's transaction fees. A transfer's cost, speed and reversibility depend on the network and service. Holding a stablecoin is different from holding a bank deposit.

These tokens can also be exchanged or borrowed through DeFi applications, where programs apply the service's rules. In asset tokenisation, the token used for payment is distinct from the bond or other asset being purchased.

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

MiCA sets requirements for issuers offering e-money tokens (EMTs) and asset-referenced tokens (ARTs) in the EU; those provisions began applying on 30 June 2024. A token seeking to follow one official currency falls within the EMT definition; ARTs refer to other values or combinations. The European Banking Authority has additional responsibilities for significant issuers. MiCA's token rules are separate from the securities rules governing ETPs.

Global market share does not establish which tokens an EU platform can offer. On 8 October 2026, the European Securities and Markets Authority (ESMA) called on MiCA-authorised crypto-asset service providers to stop offering EU clients services involving non-compliant stablecoins. For existing customer holdings, its opinion permits providers to carry out only limited, temporary activities, such as conversion or withdrawal. ESMA asked national regulators to ensure providers completed this transition no later than three months after publication.

ESMA's interim MiCA register lists EMT and ART issuers and token information. An EMT issuer's white paper describes the token's rights, terms and risks. Listing that document does not mean an authority has approved its contents.

The GENIUS Act in the US

The GENIUS Act, 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 an exchange-traded product: a security linked to an index of crypto-assets involved in stablecoin issuance, management and infrastructure. The index is rebalanced quarterly. 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. A crypto index ETP combines several crypto-asset exposures in one security.

USDT, USDC and PYUSD use Ethereum for some transactions. Ether illustrates how a network asset can support stablecoin activity while having a price that is not tied to a dollar. The Stablecoin Index 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 is held in a brokerage account. Stablecoin infrastructure exposure through an ETP gives access to the index's crypto-assets without a personal crypto wallet.

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 authorities 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.