What it means
When a stablecoin's price drifts away from the currency it tracks, for example a digital dollar trading at 0.97 dollars.
Well run stablecoins hold reserves so each token can be redeemed one for one, and their price stays very close to the peg. A depeg can still happen if people doubt those reserves.
How it works
It's one of the risks of holding any stablecoin, and it's listed in our Risk Disclosure.
Related terms
| Term | What it means |
|---|---|
| Stablecoin | A token on a blockchain designed to keep a steady value, usually one dollar or one euro, backed by reserves. |
| USDC | A dollar stablecoin issued by Circle: one USDC is meant to be worth one US dollar, backed by dollar reserves. |
| EURC | A euro stablecoin issued by Circle: one EURC is meant to be worth one euro, backed by euro reserves. |
This glossary explains terms in general. It isn't investment, tax or legal advice.