Bitcoin could rise or fall by a fifth in a single week. That is thrilling for a trader, and terrible for a baker who must pay for flour. What the new world needed was a coin that stood still.

So builders made stablecoins: tokens designed to be worth exactly one dollar, anchored by real money held in reserve. Tether arrived in 2014, and USDC, from Circle and Coinbase, in 2018. They became the quiet workhorses of crypto — the coins people actually spend and save.

A stablecoin is a promise: for every token, one dollar sits in the vault, and you may swap one for the other. When someone buys a token, the issuer puts the dollar away; when they return the token, the dollar comes back out, and the token is destroyed.

But a promise is only as good as the vault. For years, people asked whether Tether's shelves were truly full. In 2021 it settled with New York's attorney general over past claims about its reserves. Today the biggest issuers publish regular reports from accountants on what they hold.

Not every stablecoin kept dollars in a vault. TerraUSD tried to hold its price with a clever dance of code and a sister coin called Luna. A savings app on the same chain, Anchor, offered nearly 20% a year, and billions of dollars poured in.

In May 2022 the dance broke. Large withdrawals pushed the coin below one dollar, panic followed, and within days both coins were nearly worthless — some $40 billion in value gone. Its founder, Do Kwon, later pleaded guilty to fraud charges in a US court in 2025.

Watching private coins spread, governments began to wonder about digital money of their own. The Bahamas launched its Sand Dollar in October 2020, one of the first central bank digital currencies. China has trialled its digital yuan, the e-CNY, in city after city since 2020.

A CBDC is not a blockchain in the Bitcoin sense: the central bank holds the pen. Supporters praise its speed and reach; critics worry about privacy, since the counting-house could see every purchase. In 2025, the United States ordered its agencies not to build one.

For years stablecoins sailed without clear rules. Then the lawmakers built a harbour. In Europe, the MiCA regulation began governing stablecoins in June 2024. In the United States, the GENIUS Act — the first federal law for stablecoins — was signed on 18 July 2025, requiring every token to be backed one-for-one by cash or safe, short-term assets.

By then, more than $250 billion in stablecoins were afloat. Families abroad used them to send money home in minutes; businesses settled bills on weekends; traders parked their gains between voyages. The coin that stood still had become, quietly, one of the busiest ships in the harbour.