What it means
Handing stablecoins back to the issuer in exchange for the same amount of ordinary money.
Under MiCA, holders of EURC and USDC have the right to redeem them at face value.
How it works
The right to redeem is what keeps a regulated stablecoin close to its peg.
Related terms
| Term | What it means |
|---|---|
| Mint and burn | Creating new tokens (mint) or destroying them (burn), which is how a stablecoin's supply follows deposits and redemptions. |
| Reserves | The cash and short term assets a stablecoin issuer holds to back every token in circulation. |
| MiCA | Markets in Crypto-Assets: the EU's rulebook for crypto-assets and the companies that issue or handle them, in force since 2024. |
This glossary explains terms in general. It isn't investment, tax or legal advice.