Understanding Cryptocurrency and Stablecoins

Overview

As digital currencies become an increasingly important part of business finance, understanding the differences between cryptocurrencies and stablecoins can help you make informed decisions about when and how to use them. This article explains the key distinctions and how each applies to your Slash account.

What is Cryptocurrency?

Cryptocurrency is digital money that uses blockchain technology to record and verify transactions. Unlike traditional currencies issued by governments, cryptocurrencies operate on decentralized networks without a central authority controlling them.

Key characteristics of cryptocurrency:

• Volatility - Prices can change significantly in short periods. Bitcoin, for example, has seen price swings of 10% or more in a single day.
• Decentralization - No single institution controls the currency; instead, a network of computers validates transactions.
• Blockchain-based - All transactions are recorded on a public, distributed ledger that anyone can verify.
• Limited supply - Many cryptocurrencies have a fixed maximum supply, which can influence their value.

Popular cryptocurrencies include Bitcoin (BTC) and Ethereum (ETH).

What are Stablecoins?

Stablecoins are a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset—typically the U.S. dollar. One stablecoin equals one dollar, making them predictable and practical for everyday business transactions.

Key characteristics of stablecoins:

• Price stability - Designed to maintain a 1:1 value with the underlying asset (e.g., $1 USD).
• Fast transactions - Transfers settle in minutes rather than the days required for traditional bank transfers.
• Lower fees - Transaction costs are typically lower than wire transfers, especially for international payments.
• 24/7 availability - Unlike traditional banking, stablecoin transfers can occur at any time, including weekends and holidays.

Stablecoins Supported on Slash

Slash supports two of the most widely used stablecoins:

• USDC (USD Coin) - Issued by Circle and backed by cash and short-term U.S. Treasury bonds. USDC publishes regular attestation reports verifying its reserves.
• USDT (Tether) - The most traded stablecoin by volume, backed by cash, cash equivalents, and other assets.

Both stablecoins can be sent and received across multiple blockchain networks, including Ethereum, Base, Polygon, Solana, Tron, Stellar, Arbitrum, Optimism, and Avalanche.

Cryptocurrency vs. Stablecoins: Key Differences

| Feature | Cryptocurrency (e.g., Bitcoin) | Stablecoins (e.g., USDC) |

|---------|-------------------------------|-------------------------|

| Value | Fluctuates based on market | Pegged to $1 USD |

| Use case | Investment, speculation | Payments, transfers, payroll |

| Volatility risk | High | Minimal |

| Business utility | Limited for daily operations | Ideal for transactions |

Why Slash Uses Stablecoins

Slash supports stablecoins rather than volatile cryptocurrencies because they combine the benefits of blockchain technology—speed, low cost, and 24/7 availability—with the stability businesses need to manage cash flow confidently.

With stablecoins on Slash, you can:

• Fund your account instantly using crypto from an external wallet
• Send payments to vendors or contractors who accept stablecoins
• Move money internationally without high wire transfer fees or multi-day delays
• Access your funds at any time, without banking hours restrictions

Need More Help?

If you have questions about using stablecoins with your Slash account, contact our support team through the Help section in your dashboard or email support@slash.fi. For more information about sending and receiving crypto, see our article on Crypto Transfers.