What is a stablecoin?

Why not just use a bank transfer?

A bank transfer between two countries can take days, costs a fee at both ends and stops on weekends. For a campaign collecting small amounts from many people, that's a real problem: the fees eat the pledge before it arrives.

A stablecoin transfer settles in seconds, costs a fraction of a cent in network fees and works every day. That's the whole reason platforms like this one use them. It's a way to pay, not an investment.

What backs a stablecoin?

The one used here is USDC, issued by Circle, which publishes monthly attestations of the reserves behind it. Those reserves are cash and short dated government debt.

This matters because not every stablecoin works that way. Some are backed by other crypto assets, and some by nothing but an algorithm and confidence. Those have failed before and taken people's money with them.

What can still go wrong with a stablecoin?

A stablecoin can lose its peg: one token stops trading at one dollar. It has happened to well regarded issuers during banking stress. The peg is usually restored, but anyone who sold in the gap took a real loss.

Holding a stablecoin isn't a deposit. There's no deposit guarantee scheme behind it, no compensation fund and no regulator who'll make you whole if the issuer fails.

Do you have to deal with it yourself?

Not really. You see every amount in your own currency, and campaigns run in USDC underneath. You don't need an exchange account or a wallet of your own to back a project.

When you want your money out, here's how it works:

You can send your stablecoin to any address you choose. The network fee comes out of your balance, and you see it before you confirm. Selling it for your local currency, to a card or a bank account, happens on a licensed provider's own screen, which verifies you and sets its own fee. The app offers that only where it's available.