What is stable about a stablecoin?

Why can a stablecoin’s price move?

Stable describes a price target. The US dollar is a common reference, but that does not guarantee that every market trade happens at one dollar or that the token has bank-deposit protection.

The mechanisms differ. Some coins rely on fiat reserves, others on crypto collateral or other arrangements. The relevant risks come from how the particular coin works, not just from its stablecoin label.

Source: Ethereum.org：Stablecoins

Reserves and your right to redeem are different questions

An issuer may offer redemption without making it available to every token holder. Identity, location, minimum amounts and fees can affect whether you can exchange tokens directly for fiat money.

If you bought through an exchange, you may still need to sell on the market to exit. The issuer having reserves and you being able to redeem directly at the target price are separate matters.

Source: Ethereum.org：Stablecoins

A completed transfer is not a dollar bank deposit

Sending a stablecoin to another address transfers the token. If the recipient needs dollars in a bank account, selling or redeeming it and withdrawing the money are further steps, with their own eligibility conditions and fees.

Before paying, agree on the token and network the recipient accepts. The same name on different networks does not mean a receiving platform supports them all. Counting only the blockchain fee can also miss the cost of converting into the currency the recipient needs.

Where does stablecoin yield come from?

Some platforms offer a return on stablecoin deposits through lending or other investment strategies. The risks then include what happens to the deposited assets, as well as the token itself.

For a yield product, the use of your assets and the withdrawal terms matter alongside the advertised rate. A token’s dollar price target does not guarantee that return.

Source: Ethereum.org：StablecoinsBIS：Financial stability implications of tokenisation