2 PAYMENT METHOD PROFILES: STABLECOIN
2.6 Stablecoin Introduction
Stablecoins are cryptocurrencies that are pegged to a stable asset, most commonly a fiat currency such as the U.S. Dollar. 677 Their stability leads to less volatility, which has created real potential for them as a C2B payment method in retail. There are over 200 stablecoin issuers globally with Tether (USDT) and Circle (USDC) making up 83% of the share of market cap. 678 Brief History While the world may have seen the first stablecoin in 2014, we must look back a little further to understand the history and development of stablecoins as we know them today. As stated in the definition, stablecoins are a form of cryptocurrency (crypto). Cryptocurrency gained widespread awareness in 2008 with the release of a white paper introducing Bitcoin to the world. However, the idea of cryptocurrency had been a topic of curiosity for many scholars prior to 2008. Known as the “Grandfather of Crypto,” 679 David Chaum introduced the idea of blind signatures – a form of digital signature where the content of a message is hidden before it is signed – in his 1983 paper Blind Signatures for Untraceable Payments. 680 681 With a vision for personal privacy without jeopardizing auditability or security of payments, Chaum blazed the path for digital currencies. Bitcoin made its infamous debut in 2008 when the anonymous Satoshi Nakamoto published a white paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System. 682 Removing third-party financial institutions from online payments is at the forefront of the paper. The first Bitcoin block, known as the Genesis Block, was mined on January 3, 2009. 683 “Mining” coins is how cryptocurrencies are increased in supply while “burning” coins is used to decrease the supply. Stablecoins “mint” and “burn” coins in exchange for fiat currencies. This is how, at least in theory, they can stay pegged to a fiat currency. 684 Stablecoins made their debut on July 21, 2014, with the release of BitUSD. While BitUSD introduced the concept of backing cryptocurrency to an underlying asset, its one-to-one value with the U.S. Dollar was lost in 2018 and has yet to recover. 685 Another attempt at stablecoin creation happened in 2014 and is still going strong today. Tether tokens are pegged one-to-one with a fiat currency while utilizing blockchain technology. They are supported by the US Dollar, Mexican Peso and Chinese Yuan and denoted as USD ₮ , MXN ₮ and CNH ₮ , respectively. Tether tokens find their stability in being 100% backed by Tether’s reserves. 686 Today, there are over 200 stablecoins with the supply reaching approximately $249 billion in July 2025. 687 However, the supply is somewhat volatile as can be seen in the historical growth graph below:
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