Stablecoin Terms and Definitions

Understanding stablecoins is easier than you think. Simplify the education process with Blockfer's essential stablecoin terms and their definitions below.


AML - ‘Anti Money Laundering’. A formation of laws created by regulators in order to prevent illegally sourced funds from being claimed as legitimate income.

Centralized Stablecoin

A stablecoin created and maintained by a third party company. While usually regulated and insured, users still must trust the stablecoin issuer to operate honestly.

Circulating Supply

The total number of accessible, liquid units issued for a specific stablecoin.


The asset used to secure and back the value of the stablecoin.

Decentralized Stablecoin

A stablecoin that is governed and maintained by smart contracts. Users do not need to trust a third party company when using decentralized stablecoins.


The public, open-source, blockchain based distributing computing platform that supports the majority of stablecoins with smart contracts.


An Ethereum protocol standard used for smart contracts that enables tokens to be issued. Most stablecoins are ERC-20s using the Ethereum blockchain.


"Know Your Customer" - Financially regulated companies, including centralized stablecoin issuers, are required by law to verify the identity of their customers.

Pegged To

Fixed exchange rate. Stablecoins were designed to maintain a 1:1 peg to their underlying asset.

Redemption Fees

Commission fees charged to customers when they redeem their stablecoins for fiat through an issuance platform.

Stablecoin Cold Storage Wallet

A physical hardware wallet device used for storing and accessing stablecoins.

Stablecoin Market Cap

The combined dollar value of all issued stablecoin units for a specific stablecoin.

Stablecoin Volume

The exchange traded volume of a stablecoin within a period of measured time, usually 24 hours.

Stablecoin White Paper

A document outlining a company’s funding requirements, business model, and product roadmap.

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