ARCrypto is a private decentralized finance group teaching sophisticated capital how to borrow against crypto, tokenized equities, and stocks without forcing a sale or triggering a recognized disposal.

How can I borrow against my crypto?

On-chain lending markets and centralized providers extend USD or stablecoin loans against Bitcoin, Ethereum, and other crypto collateral, typically at single-digit rates. ARCrypto teaches the structure, liquidation thresholds, and counsel-aware framework.

What is Buy, Borrow, Die?

Buy, Borrow, Die is a wealth-management strategy: buy long-term appreciating assets, borrow against them instead of selling, and pass them to heirs at a stepped-up basis. ARCrypto teaches the on-chain version of the same playbook.

Are these strategies tax-compliant?

ARCrypto describes mechanical features of certain on-chain operations that are not realization events under common interpretations of major-jurisdiction tax law. ARCrypto does not replace tax counsel.

Principals with existing wealth managers, entrepreneurs digitizing and tokenizing their business with AI and DeFi, and beginners ready to learn. Three tiers: Galaxy, Apex, Gravity.

What Is a Stablecoin? USDC, USDT, and DAI Explained

Key takeaways

A stablecoin is a cryptocurrency designed to track the price of another asset — almost always the US dollar.
The three biggest are USDC (Circle), USDT (Tether), and DAI (MakerDAO/Sky). Combined, they handle hundreds of billions in monthly volume.
USDC is the most regulated and audited. USDT has the most liquidity globally. DAI is the most decentralized.
For most users, USDC is the default. The others are situational tools.
Educational only. Stablecoins have real risks: peg failures, regulatory changes, and counterparty risk on the issuers.

What is a stablecoin?

A stablecoin is a cryptocurrency engineered to maintain a stable price — typically pegged 1:1 to the US dollar. One USDC equals one dollar. One USDT equals one dollar. Most of the time, anyway.

The point of stablecoins isn’t to make money on price. It’s to capture all the benefits of crypto rails (instant global transfer, 24/7 settlement, programmability, no banking middlemen) while pricing in something stable enough to use as money.

Without stablecoins, you can’t price a $50,000 invoice in a volatile asset like ETH that might be worth $48,000 by the time it arrives. With stablecoins, the global economy gets a programmable dollar.

How do stablecoins actually work?

1. Fiat-backed (USDC, USDT)

The issuer holds real US dollars (and short-term Treasury bills) in a bank account. For every dollar held, they mint one stablecoin. When you redeem, they burn the stablecoin and wire you a real dollar.

This is the simplest model. The trade-off: you’re trusting the issuer. If Circle (USDC) or Tether (USDT) ever has reserve problems, the peg can break.

2. Crypto-collateralized (DAI)

Instead of dollars in a bank, DAI is backed by crypto (mostly ETH and USDC) locked in smart contracts. To mint $100 of DAI, you typically need to lock $150+ of crypto as collateral. The over-collateralization absorbs price volatility.

This is more decentralized — there’s no Circle or Tether as a single point of failure. The trade-off: it’s mechanically more complex and depends on the underlying collateral staying valuable.

3. Algorithmic (mostly avoid)

Maintains the peg through algorithmic supply adjustments instead of collateral. Terra/UST was the most famous one. It collapsed in May 2022, wiping out ~$60B. Most pure algorithmic stablecoins have failed for the same structural reasons. Skip these.

The three you need to know

USDC (USD Coin)

Issued by Circle. Most regulated, most audited, transparent monthly reserve attestations. Used as the default on-chain dollar by most US-based DeFi protocols and institutional users. Best choice for most operators.

USDT (Tether)

Issued by Tether. Largest supply by volume. Most liquidity globally, especially in Asia and Latin America. Less transparent reserves historically, though improving. Best for global liquidity, especially non-US settings.

DAI (MakerDAO / Sky)

Issued by a decentralized protocol. Backed by crypto + USDC. No central issuer to subpoena or shut down. Best for decentralization-maximalists or for situations where you want to avoid US regulator-controllable stablecoins.

Other names you’ll see

PYUSD (PayPal’s stablecoin, growing), FDUSD (First Digital, Asia), USDS (newer Sky-issued sibling of DAI). Generally niche or newer. The big three above cover ~95% of real-world stablecoin use.

What can you do with stablecoins?

Hold dollars without a US bank account. Especially valuable for expats, digital nomads, and anyone in a country with capital controls.
Send money internationally in seconds for cents. $50K wire would cost $30 and take 3 days. The same in stablecoin: ~$1 and 30 seconds.
Earn yield on dollar-equivalents. Lending markets (Aave, Morpho, Compound) typically pay 4-8% APY on stablecoin deposits.
Receive payments without merchant accounts. Especially for cross-border B2B and digital goods.
Buy crypto without going through fiat each time. Trade between crypto pairs without bank wires.

What are the risks?

Peg failure

The stablecoin loses its 1:1 peg. USDC briefly traded as low as $0.87 during the SVB banking crisis in March 2023 before recovering. Plan for it. Don’t hold 100% of your dollar exposure in one stablecoin.

Issuer risk (USDC, USDT)

If Circle or Tether had a reserve problem, the stablecoin could lose its peg. Mitigation: spread across multiple stablecoins.

Regulatory risk

Stablecoin regulation is evolving in the US, EU, and elsewhere. Specific rules can change quickly.

Smart-contract risk (DAI)

DAI relies on smart contracts that could theoretically have bugs. Mitigated by extensive auditing but never eliminated.

Top courses for understanding stablecoins properly

ARCrypto Online Course — covers stablecoin selection, payment routing, and lending strategies for HNW principals and expats
Tether and Circle public reserve reports — read directly to understand backing
Bankless deep-dives on stablecoins — free, current

Ready to use stablecoins strategically?

The ARCrypto online course covers stablecoin payment routing across jurisdictions, lending markets for yield, and the operational stack for expats and digital nomads using stablecoins as their primary cash. Online curriculum + live mastermind + private community. By application only.

Explore the course →

Frequently asked questions

Are stablecoins really stable?

Mostly, yes. The major fiat-backed stablecoins (USDC, USDT) trade within a fraction of a cent of $1.00 99%+ of the time. Brief depegging events have happened (USDC at $0.87 during SVB; UST at $0 when it collapsed). Plan for the rare event.

Are stablecoins safer than holding dollars in a bank?

Different risk profile, not necessarily safer. Bank dollars have FDIC insurance up to $250K. Stablecoins don’t — but they’re not subject to bank failures or freezes. Sophisticated holders use both.

Can I lose money on stablecoins?

Yes — through peg failures, issuer insolvency, smart-contract bugs (for DAI), or sending to the wrong address. The capital-loss scenarios are rare for major stablecoins but real.

Do I pay taxes on stablecoins?

In the US, swapping fiat for stablecoin or vice versa typically isn’t a taxable event (no gain/loss on a $1-pegged asset). Earning yield on stablecoins is taxable as ordinary income. Always work with a qualified CPA.

Which stablecoin should I use?

For most US-based operators: USDC for default, with some USDT for global liquidity if you operate cross-border. For decentralization-maximalists: DAI. We don’t make specific recommendations — your situation depends on jurisdiction, use case, and counterparty preferences.

Educational content only. Not investment, tax, or legal advice. ARC Educational LLC is not a broker, dealer, exchange, custodian, or investment adviser. Always work with qualified, licensed professionals. See our disclaimers.