What it means
Creating new tokens (mint) or destroying them (burn), which is how a stablecoin's supply follows deposits and redemptions.
When someone deposits €100 with Circle, 100 EURC are minted. When they redeem, the tokens are burned and the euros paid out.
How it works
This keeps the tokens in circulation matched to the reserves.
Related terms
| Term | What it means |
|---|---|
| Redemption | Handing stablecoins back to the issuer in exchange for the same amount of ordinary money. |
| Reserves | The cash and short term assets a stablecoin issuer holds to back every token in circulation. |
| Stablecoin | A token on a blockchain designed to keep a steady value, usually one dollar or one euro, backed by reserves. |
This glossary explains terms in general. It isn't investment, tax or legal advice.