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Stablecoins play a critical role in bridging traditional finance and crypto. They combine the stability of fiat currencies with the flexibility of blockchain, making them one of the most widely used innovations in the crypto space.
What is a stablecoin?
Stablecoins are digital assets designed to maintain a stable value. They are usually pegged to a traditional currency like the USD or Euro or a commodity such as gold.
Unlike cryptocurrencies such as Bitcoin or Ethereum, whose prices can fluctuate dramatically, stablecoins aim to minimise volatility. They offer the convenience of crypto without the rollercoaster price movements.
In simple terms:
A stablecoin = blockchain-based token + value stability of fiat money.
How do stablecoins maintain their peg?
Maintaining a 1:1 peg (for example, 1 USDT = 1 USD) is achieved through different mechanisms depending on the stablecoin type:
Fiat-backed stablecoins like Tether (USDT) and USD Coin (USDC) are backed by real-world reserves like cash, government bonds, or commercial paper held by a custodian.
Crypto-backed stablecoins, such as DAI, use cryptocurrencies as collateral. To manage volatility, they’re typically overcollateralized (you deposit $150 in crypto to mint $100 of stablecoin).
Algorithmic stablecoins rely on smart contracts and algorithms to control supply and demand. The supply expands or contracts to maintain the peg.
Arbitrage and redemption mechanisms usually return the price to equilibrium when the peg slips. However, transparency and proper reserve management are key to maintaining trust.
What are stablecoins used for?
Stablecoins serve multiple purposes:
Liquidity & trading pairing
Most crypto trades are executed against stablecoins (e.g., BTC/USDT, ETH/USDC), making them essential for market stability.
Store of value
Traders often move funds into stablecoins during volatile market conditions to preserve capital.
Cross-border payments & remittances
They enable fast, low-cost international transfers without going through banks or intermediaries.
DeFi & yield generation
Stablecoins power decentralised finance (DeFi), providing liquidity for lending, staking, and yield farming.
Key players in the stablecoin market
| Stablecoin | Issuer | Backing Type | Collateral / Reserves | Networks Supported |
| USDT | Tether | Fiat-backed | USD, T-bills, and other reserves | Ethereum, Tron, Solana, Polygon, Avalanche, and more |
| USDC | Circle | Fiat-backed | USD and short-term U.S Treasuries | Ethereum, Solana, Polygon, Arbitrum, Base, and more |
| DAI | MakerDAO | Crypto-backed | Overcollateralized crypto (ETH, USDC, wBTC, etc.) | Ethereum and Layer 2 networks |
| RLUSD | Ripple Labs | Fiat-backed | USD reserves (1:1 held with regulated custodians) | XRP Ledger (XRPL) |
| AUSD | Agora | Fiat-backed | USD reserves held 1:1 in regulated U.S. financial institutions | Ethereum and other EVM-compatible chains |
How to buy stablecoins on Independent Reserve
Buying stablecoins on Independent Reserve is fast and secure. Here’s how:
1. Create your account
To buy stablecoins, you can create an account on Independent Reserve with SingPass in minutes.
We will need a few more documents for verification purposes.
- Proof of address (accepted documents include bank statements, utility bills, or government-issued documents
- Proof of identity (driver’s licence, passport, and a selfie)
This ensures compliance with MAS regulations and enhances security for all users.
Learn how to sign up with Independent Reserve here.
2. Deposit funds from DBS/POSB
DBS customers can fund their Independent Reserve account using multiple payment options, including:
- PayNow (no processing fee)
- FAST ($2.50 processing fee for deposits under SGD 1,000)
3. Buy Bitcoin and crypto
Once your funds have reached your account, buying Bitcoin is quick and straightforward.
- Log in to your account.
- Navigate to the Trade screen.
- Select your preferred stablecoin from the list of available cryptocurrencies.
- Enter the SGD amount you want to purchase.
- Click Buy.
- Review transaction details and confirm your order.
- Once the transaction is complete, your stablecoin will be credited to your Independent Reserve wallet.
Frequently asked questions
Can I trade stablecoins using OTC?
You can buy and sell all major cryptocurrencies and stablecoins using our OTC desk, including USDT and USDC.
Can businesses trade stablecoins with Independent Reserve?
Yes, Independent Reserve offers crypto solutions for businesses/corporates. Book a call with our business team to find out more.
