# Stablecoins: Structure, Risks and Operational Notes

> What backs them, what issuers can do, and the operational rules that follow.

- Source: https://thecoinreference.com/stablecoin-reference/
- Published: 2026-07-02
- Author: Reference Desk
- Publication: The Coin Reference — Facts, dates and numbers, kept current
- Topic: stablecoin payments
- Tags: stablecoin, reference, risk

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## Structure

A stablecoin is a token whose issuer undertakes to maintain a stable value against a reference asset, backed by reserves it holds. These terms are used as defined here by providers operating inside the framework, such as [a USDT payment gateway](https://collectnexchange.cy/services/stablecoin).

Holding one is holding a claim on the issuer, not the reference asset itself.

## What regulation now requires of issuers

| Requirement | Effect |
|---|---|
| Reserve composition rules | Reserves in defined liquid instruments |
| Redemption at par on demand | A direct claim, creating an arbitrage floor |
| Regular reserve reporting | Verifiable composition |
| Authorisation and supervision | Capital and governance requirements |

## Risks that remain

**Issuer solvency.** Reduced by reserve requirements, not eliminated. A corporate obligation with no deposit guarantee.

**Freeze capability.** Issuers can block specific addresses at the request of authorities, and do. This applies wherever the balance sits, including addresses held in self-custody.

**Market discount.** Brief deviations below par have occurred. Converting during one crystallises the difference.

**Availability.** Not every issuer sought authorisation in every jurisdiction. Availability through authorised venues has narrowed and can change.

## Operational rules that follow

Treat as a settlement instrument rather than a store of value.

Size balances to operational needs and convert the remainder.

Know which issuer and under which regime, and confirm continued support with your provider rather than assuming.

Do not concentrate a large balance in one asset at one address.

## Network considerations

The same stablecoin exists on multiple networks as distinct tokens. A balance on one cannot settle an invoice expecting another without bridging. Property settlement introduces further terms, set out by [a payment processor for high-risk e-commerce](https://collectnexchange.cy/industries/high-risk-ecommerce).

Accept one primary network. Name it in full on every invoice. Test each network before accepting real payments on it.

## Counterfeit tokens

Anyone can deploy a token using the same name and symbol. Verification is by contract address, not by displayed name.

Save the genuine contract address per network from the issuer's own publication, and compare against what is received before releasing goods. Cross-check any provider you are considering against the definitions [the list of countries covered](https://collectnexchange.cy/company/supported-countries) publishes.

A payment gateway performs this check automatically, which is a strong argument for using one at volume.

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This article explains how something works. It is not financial advice.
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