Stablecoins in Sparkling, a dollar balance that moves like crypto
Stablecoins are the quiet workhorse of crypto: most trades are priced in them, most profits are parked in them, and in countries with unstable currencies they are how many people hold dollars at all. In Sparkling they are the base currency of the account, ready to become a coin, a stock token or a perp margin in one request.
How do stablecoins work?
A fiat-backed stablecoin works like a digital receipt. An issuer holds a dollar in reserve for every token in circulation; approved firms can create tokens by depositing dollars and redeem tokens for dollars, and that arbitrage keeps the market price close to one dollar.
| Type | How the peg is kept | Examples |
|---|---|---|
| Fiat-backed | Cash and short-term bonds held by the issuer | USDC, USDT |
| Crypto-backed | Over-collateralised crypto in smart contracts | DAI |
| Algorithmic | Supply rules without full reserves | Several have collapsed |
USDC and USDT compared
| USDC | USDT | |
|---|---|---|
| Issuer | Circle | Tether |
| Reserve reporting | Monthly attestations | Quarterly attestations |
| Networks in Sparkling | Solana, Ethereum, TON | Solana, Ethereum, TON |
| Role in Sparkling | Main dollar balance, perp margin, predictions | Supported for swaps |
How to buy stablecoins
The direct route is a card payment straight into USDC; the other is swapping coins you already hold. Both are covered step by step on our page on how to buy USDC.
What people use stablecoins for
- Parking trading profits without leaving crypto.
- Holding dollars in countries with high inflation or currency controls.
- Paying and sending money across borders in minutes.
- Margin for perps and stakes for prediction markets.
Are stablecoins safe?
Stablecoins carry issuer risk, reserve risk and the chance of a temporary depeg; in March 2023 USDC briefly fell below 0.90 dollars when part of its reserves sat in a failed bank. Issuers can also freeze tokens on addresses linked to crime, and stablecoins are not covered by deposit insurance. In Sparkling your stablecoins sit in your own wallet; we do not pay interest on them, and this is not financial advice.
Stablecoin questions
What are stablecoins?
Tokens designed to hold a stable value, usually one US dollar.
How do stablecoins keep their value?
Through reserves and the ability of approved firms to redeem tokens for dollars.
Which stablecoin does Sparkling use?
USDC is the main balance; USDT is supported for swaps.
Can a stablecoin lose its peg?
Yes, usually briefly during market stress or issuer problems.
Are stablecoins taxed?
In many countries swapping them counts as a disposal; small currency gains can be taxable.
Updated: