Stablecoins
The first stablecoins were issued in 2014 in an attempt to combat the volatility associated with cryptos like Bitcoin. Today, the market capitalisation of these new digital currencies stands above £6.5 billion with Tether’s USDT leading the pack. Here we review stablecoins, with definitions explained and the respective merits and drawbacks detailed. We also explain how retail investors can start trading stablecoins.
Crypto Brokers
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XTB provides a robust array of over 50 cryptocurrencies, featuring competitive spreads beginning at 0.22% on Bitcoin and leverage up to 1:5. The xStation platform facilitates trading with pairs like ETH/BTC and DSH/BTC. Traders can operate round-the-clock in a secure and transparent cryptocurrency trading environment.
Crypto Coins- ADA
- BTC
- BCH
- DSH
- EOS
- ETH
- IOTA
- LTC
- NEO
- XRP
- XLM
- TRX
- XEM
- XLM
- XMR
- DOGE
- BNB
- LINK
- UNI
- DOT
- XTZ
Crypto Spread Crypto Lending Platforms 0.22% No xStation Crypto Staking Minimum Deposit Regulator No $0 FCA, CySEC, KNF, DFSA, FSC -
IG provides more than 55 crypto CFDs and digital assets for trade and storage. It uniquely features a crypto index tracking the top 10 digital currencies by market cap, allowing broad speculation on the crypto market’s value. In the UK, its crypto services strengthened post-acquisition of an FCA digital asset licence, enabling regulated trading and investment in leading cryptocurrencies.
Crypto Coins- BTC
- ETH
- SOL
- XRP
- BCH
- ADA
- TIA
- LINK
- EOS
- HBAR
- ICP
- LTC
- NEAR
- NEO
- ONDO
- PEPE
- DOT
- POL
- SHIB
- XLM
- SUI
- TRX
- TON
- UNI
- DOGE
- AAVE
- APT
- ARB
- AVAX
- CRYPTO10
Crypto Spread Crypto Lending Platforms Variable No Web, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime Crypto Staking Minimum Deposit Regulator No $0 FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM, JFSA -
IBKR offers access to Bitcoin, Bitcoin Cash, Ethereum, and Litecoin at attractive commission rates without the need for a crypto wallet. Furthermore, traders can explore a variety of assets, including crypto indices like the NYSE Bitcoin Index, and futures contracts such as BAKKT Bitcoin Futures.
Crypto Coins- BTC
- LTC
- ETH
- XRP
Crypto Spread Crypto Lending Platforms 0.12%-0.18% No Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower Crypto Staking Minimum Deposit Regulator No $0 FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM -
Gemini provides access to over 110 cryptocurrencies on its platform, supported by its own Gemini Dollar stablecoin and perpetual swap derivatives. The robust ActiveTrader system is tailored for online trading, offering numerous technical indicators across seven time frames.
Crypto Coins- BTC
- ETH
- XRP
- ADA
- DOGE
- DOT
- BCH
- LTC
- UNI
- LINK
- FIL
- XLM
- WBTC
- EOS
- SOL
- AAV
- XTZ
- ATOM
- MKR
- DAI
- COMP
- ZEC
- ENJ
- GRT
- SNX
- BAT
- MANA
- YFI
- UMA
- ZRX
Crypto Spread Crypto Lending Platforms Transaction fee from $0.99 Yes ActiveTrader, AlgoTrader, TradingView Crypto Staking Minimum Deposit Regulator Yes $0 NYDFS, MAS, FCA -
Kraken is a dedicated crypto exchange offering over 220 cryptocurrencies, including major tokens like Bitcoin and various altcoins. Traders can engage in spot markets with leverage of up to 5:1, or in futures markets with leverage up to 50:1. The platform provides low fees and is highly user-friendly.
Crypto Coins- AAVE
- ALGO
- ANT
- REP
- REPV2
- BAT
- BAL
- XBT
- BCH
- ADA
- LINK
- COMP
- ATOM
- CRV
- DAI
- DASH
- MANA
- XDG
- EWT
- EOS
- ETH
- ETC
- FIL
- FLOW
- GNO
- ICX
- KAVA
- KEEP
- KSM
- KNC
Crypto Spread Crypto Lending Platforms 0-0.26% average No AlgoTrader, Quantower Crypto Staking Minimum Deposit Regulator Yes $10 FCA, FinCEN, FINTRAC, AUSTRAC, FSA -
The broker’s Bahamas entity facilitates access to cryptocurrencies. Traders can utilise a vast array of indicators to customise their strategies, with transparent pricing and no hidden fees.
Crypto Coins- BTC
- ETH
- LTC
Crypto Spread Crypto Lending Platforms Fixed No MT4 Crypto Staking Minimum Deposit Regulator No $0 FCA, ASIC, FSCA, SCB, FSA -
Trade over 15 popular cryptocurrencies such as Bitcoin and Ethereum. Engage in trading these digital assets 24/7, with transparent fees. Access up to 1:10 leverage on leading tokens like BTC.
Crypto Coins- BTC
- ETH
- LTC
- BCH
- DOT
- EOS
- LINK
- XLM
- NEO
- ADA
- SOL
- XRP
- BNB
- XMR
- AVAX
- DOGE
Crypto Spread Crypto Lending Platforms Variable No ActivTrades, MT4, MT5, TradingView Crypto Staking Minimum Deposit Regulator No $0 FCA, CMVM, CSSF, SCB
XTB
IG
Interactive Brokers
Gemini
Kraken
Trade Nation
ActivTradesSafety Comparison
Compare how safe the Stablecoins are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
|---|---|---|---|---|---|
| XTB | ✔ | ✔ | ✔ | ✔ | |
| IG | ✔ | ✔ | ✔ | ✔ | |
| Interactive Brokers | ✔ | ✔ | ✘ | ✔ | |
| Gemini | ✔ | ✘ | ✘ | ✔ | |
| Kraken | ✔ | ✘ | ✘ | ✘ | |
| Trade Nation | ✔ | ✔ | ✘ | ✔ | |
| ActivTrades | ✔ | ✔ | ✘ | ✔ |
Payments Comparison
Compare which popular payment methods the Stablecoins support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
|---|---|---|---|---|---|---|
| XTB | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| IG | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| Interactive Brokers | ✔ | ✔ | ✘ | ✘ | ✘ | ✘ |
| Gemini | ✔ | ✘ | ✔ | ✘ | ✘ | ✘ |
| Kraken | ✔ | ✘ | ✘ | ✘ | ✘ | ✘ |
| Trade Nation | ✔ | ✔ | ✔ | ✘ | ✔ | ✘ |
| ActivTrades | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
Mobile Trading Comparison
How good are the Stablecoins at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
| XTB | iOS & Android | ✔ | ||
| IG | iOS & Android | ✔ | ||
| Interactive Brokers | iOS & Android | ✔ | ||
| Gemini | iOS & Android | ✘ | ||
| Kraken | ✔ | ✘ | ||
| Trade Nation | iOS & Android | ✘ | ||
| ActivTrades | iOS & Android | ✘ |
Beginners Comparison
Are the Stablecoins good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
| XTB | ✔ | $0 | 0.01 Lots | ||
| IG | ✔ | $0 | 0.01 Lots | ||
| Interactive Brokers | ✔ | $0 | $100 | ||
| Gemini | ✘ | $0 | 0.00001 BTC | ||
| Kraken | ✔ | $10 | Variable | ||
| Trade Nation | ✔ | $0 | 0.1 Lots | ||
| ActivTrades | ✔ | $0 | 0.01 Lots |
Advanced Trading Comparison
Do the Stablecoins offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
| XTB | - | ✔ | 1:30 | ✘ | ✘ | ✔ | ✘ |
| IG | Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | ✔ | 1:30 (Retail), 1:222 (Pro) | ✔ | ✔ | ✔ | ✔ |
| Interactive Brokers | Capitalise.ai, TWS API | ✘ | 1:50 | ✘ | ✔ | ✔ | ✔ |
| Gemini | - | ✘ | - | ✘ | ✘ | ✘ | ✘ |
| Kraken | Kraken Futures is integrated in other platforms which have bots: Bookmap, Caspian, FMZ Quant, Gunbot, HaasOnline, Hyndor, Margin | ✘ | - | ✘ | ✘ | ✘ | ✘ |
| Trade Nation | Expert Advisors (EAs) on MetaTrader | ✘ | 1:500 (entity dependent) | ✘ | ✘ | ✘ | ✘ |
| ActivTrades | Yes (APIs), Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (UK and EU), 1:400 (Global & Pro) | ✘ | ✘ | ✔ | ✘ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Stablecoins.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
| XTB | |||||||||
| IG | |||||||||
| Interactive Brokers | |||||||||
| Gemini | |||||||||
| Kraken | |||||||||
| Trade Nation | |||||||||
| ActivTrades |
Our Take On XTB
"XTB excels for novice traders with its superb xStation platform, minimal trading costs, no required deposit, and outstanding educational resources, many of which are fully integrated into the platform."William Berg
Reviewer
Pros
- XTB offers a superb array of educational resources, such as training videos and articles, embedded within the platform to assist traders of all experience levels.
- XTB has raised interest rates on uninvested funds and introduced zero-fee ISAs (for ETFs and real shares, or 0.2% on trades over €100k) for UK clients, offering access to a wide array of markets.
- XTB processes withdrawals swiftly, paying within 3 business days, subject to the method and amount.
Cons
- The demo account lasts only four weeks, posing a challenge for traders wanting to fully explore the xStation platform and refine short-term strategies before investing actual money.
- Trading fees are competitive, with average EUR/USD spreads of about 1 pip. However, they are not as low as the most affordable brokers, such as IC Markets. Additionally, an inactivity fee applies after a year.
- XTB has stopped supporting MT4, restricting traders to its own platform, xStation. This decision may discourage experienced traders accustomed to using the MetaTrader suite.
Our Take On IG
"IG offers a complete package: an easy-to-use web platform, top-tier beginner education, enhanced charting via TradingView, up-to-date data, and strong trade execution for seasoned traders."Tobias Robinson
Reviewer
Pros
- The ProRealTime advanced charting platform remains free, provided traders meet modest monthly activity requirements.
- The web-based platform supports traders at every level, offering advanced charting tools and real-time market data vital for trading. Additionally, IG now includes TradingView integration.
- IG provides a wide range of professional and engaging educational materials, such as webinars, articles, and analyses, tailored for traders.
Cons
- IG imposes a monthly inactivity fee of $12 after two years, discouraging occasional traders.
- Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
- In the UK and EU, negative balance protection is available. However, US clients lack account protection and guaranteed stop losses.
Our Take On Interactive Brokers
"Interactive Brokers ranks highly for seasoned traders due to its robust charting platforms, live data, and bespoke layouts via the new IBKR Desktop app. Its competitive pricing and sophisticated order choices appeal to traders, and its wide equity options are industry-leading."Tobias Robinson
Reviewer
Pros
- IBKR offers an economical environment for traders, featuring low commissions, narrow spreads, and a clear fee structure.
- The TWS platform is tailored for intermediate and advanced traders, featuring over 100 order types and a dependable real-time market data feed with exceptional uptime.
- Interactive Brokers has been awarded Best US Broker for 2025 by DayTrading.com. This accolade highlights its dedication to traders in the US, offering exceptionally low margin rates and access to global markets at minimal expense.
Cons
- Support can be sluggish and frustrating. Tests reveal that you may face challenges reaching customer service quickly, which could result in delays in issue resolution.
- You are limited to a single active session per account, meaning you cannot use both your desktop programme and mobile app at the same time. This restriction can occasionally lead to a frustrating experience for traders.
- The learning curve for TWS is quite steep, making it tough for novice traders to navigate and grasp all its features. In contrast, Plus500's web platform is far more accessible for those new to trading.
Our Take On Gemini
"Gemini’s ActiveTrader platform, combined with TradingView, is ideal for serious crypto traders wanting robust charting tools. However, unnecessary fees and past security incidents are drawbacks."William Berg
Reviewer
Pros
- The TradingView integration offers excellent tools, such as backtesting and algorithmic trading features.
- The trading app boasts a modern, user-friendly design with an intuitive interface. It offers a superb selection of charting tools for traders.
- A good selection of educational guides and tutorials is available for novice traders.
Cons
- There is no practice or demo account available for prospective traders.
- The mobile app's 'convenience fee' appears arbitrary, reducing the feature's efficiency for traders.
- Certain major cryptocurrencies by market capitalisation are unavailable for purchase on Gemini.
Our Take On Kraken
"Kraken is ideal for traders seeking a wide range of cryptocurrencies, including Bitcoin, along with an excellent security reputation."William Berg
Reviewer
Pros
- An impressive selection of over 220 well-established cryptocurrencies.
- NFT marketplace and crypto staking offered for traders.
- Minimum deposit requirement is only $10.
Cons
- Limited support for newer altcoins.
- Slow processing times
- Minimal leverage in spot trading.
Our Take On Trade Nation
"Trade Nation is ideal for novice traders seeking diverse markets on an easy-to-use platform. It offers no minimum deposit, complimentary funding options, and robust educational resources."Tobias Robinson
Reviewer
Pros
- A variety of trading platforms and apps, such as MT4, make the brand suitable for experienced traders.
- Global traders can use accounts in various currencies.
- Beginners benefit from a modest initial deposit.
Cons
- Reduced legal safeguards with an offshore entity.
Our Take On ActivTrades
"ActivTrades stands out for traders at every level, offering nearly unparalleled execution speeds of 4ms. Choose from top-tier trading software like MT4, MT5, TradingView, or the user-friendly ActivTrader, perfect for budding traders."Tobias Robinson
Reviewer
Pros
- Based on our tests, ActivTrades offers swift and reliable support via live chat, email, and phone in multiple languages. This makes it an excellent choice for both traders and newcomers seeking quality assistance.
- With execution speeds averaging 4ms and an order completion rate of 93.6%, ActivTrades provides an outstanding platform for traders. It supports rapid strategies without imposing limits on short-term approaches.
- ActivTrades provides competitive spreads, especially for forex trading, starting at 0.5 pips on major currency pairs without extra commissions. Additionally, the €/£10 inactivity fee is only applied after 52 weeks, benefiting active traders.
Cons
- Its research tools are decent, although somewhat lacking. The expanding 'Analysis' hub is useful, but the absence of Trading Central or Autochartist means advanced technical insights are missing. This limitation may hinder traders seeking to spot opportunities in volatile markets.
- The platform lacks features for copy or social trading, which is a disadvantage for traders interested in passive investing or replicating the trades of seasoned traders. This is particularly evident when compared to eToro and Vantage.
- ActivTrades needs improvement in educational resources to compete with firms like XTB and CMC Markets. While it offers well-presented and informative webinars, the selection of courses and quizzes remains limited, hindering a more comprehensive and engaging learning experience for traders.
What Is A Stablecoin?
Stablecoins are digital currencies pegged to assets with low levels of volatility, such as fiat money like GBP, commodities like gold, or other cryptos like Ripple (XRP). They are essentially a hybrid coin that balances the benefits of cryptos, such as secure money transfer and blockchain technology, with the price stability associated with precious metals, for example.
How Do Stablecoins Work?
There are several types of stablecoins, those pegged to established assets and those that aren’t, known as seigniorage-style. Stablecoins pegged to an asset like gold and are subject to the same price movements, market risks, and regulatory requirements. The purpose of a seigniorage-style mechanism is to use algorithms to control the supply of a coin much like the World Bank printing and destroying money.
Currency-Backed Stablecoins
Fiat-backed stablecoins are tied to a currency, such as the GBP. A third party will hold a reserve of the currency and peg it to crypto, with the stability and value aligned to the cost of maintaining the currency reserve, including any legal requirements such as compliance audits. Stablecoins can be pegged to one currency or multiple, with the US Dollar, Euro, Yen and Yuan the most common. The ratio of the stablecoin vs traditional currency is fixed and reflects the market supply of the crypto.
Currency-backed stablecoins are the most popular type with leading assets including Tether (USDT), USD Coin (USDC), and Gemini Dollar (GUSD). But whilst USDT is the largest by market share, the Bitfinex exchange who facilitated trading in the asset came under public scrutiny after being unable to provide audits for their reserves.
Commodity-Backed Stablecoins
Commodity-backed stablecoins are tied to physical assets such as energy and precious metals, with gold the most frequently used. Because a digital currency is pegged to the value of the commodity, its price may fall if demand for silver drops, for example. Stablecoins are redeemable at the conversion rate to take possession of the asset and can be pegged to more than one commodity.
Crypto-Backed Stablecoins
Crypto-backed stablecoins use smart contracts via blockchain technology while currency-backed stablecoins are validated off the blockchain. Since cryptocurrencies have a history of volatility, if there is a sudden price crash the smart contract may be liquidated. As a result, it’s worth paying off the debt on the smart contract in the event the value of the crypto drops.
There are limited regulations or monetary policy requirements to adhere to with cryptocurrency-backed stablecoins which are often stored on decentralised exchange indexes. Organisations typically over-collateralise and store more of the pegged digital currency to protect against market fluctuations. However, this can be easier to audit as a company’s collateral balance can be checked on the blockchain.
Seigniorage-Style
Non-backed stablecoins do not use a reserve but operate like central banks by increasing or decreasing the supply of a coin to maintain price stability. This is achieved by using algorithms and smart contracts which manage the supply ratio. If the price of the stablecoin surpasses the value of the fiat currency it tracks; more tradable coins will be released driving down the price. The opposite will take place should the price of the stablecoin fall.
Best Stablecoins In 2026
Topping the list of the best 5 stablecoins in 2026 is:
- Tether (USDT) – The best-known stablecoin is pegged to gold, fiat currency and cash equivalents
- True USD (TUSD) – The leading coin is backed by the US Dollar and is among the most liquid options on the market. The company behind the asset, TrustToken, also offers TrueGBP, which is pegged to the Pound Sterling
- Paxos Standard (PAX) – The stablecoin seeks 1:1 parity with the US Dollar
- USD Coin (USDC) – Backed by crypto heavyweight Coinbase, the world’s largest Bitcoin broker has released its own popular stablecoin
- Binance USD (BUSD) – Another of the top 10 crypto exchanges, Binance’s stablecoin is pegged to the US Dollar at a 1:1 ratio
How To Start Trading Stablecoins
Choose An Exchange
Stablecoins are available to trade on key cryptocurrency exchanges, with examples including Coinbase, Binance, Exodus, Kraken and, Crypto.com. Each exchange provides a list of tradable coins and any fees for UK traders. We recommend opting for a provider with good user reviews and a decent range of assets compared with rankings.
Open An Account
Once traders have decided on an exchange they will need to open a live trading account. Some crypto exchanges permit signing up without KYC documentation, however, most will need identity documents to be approved, including Coinbase. This helps to reduce the risks posed by fraud and money laundering.
Deposit Funds
Before you can start buying and selling stablecoins, you will need to deposit funds. This can usually be done via traditional depositing methods such as Mastercard or e-money transfers. Traders can protect their Stablecoin portfolio by investing in a hardware wallet such as those seen on the XRP Ledger, though it’s worth doing your own comparison of providers before investing. Crypto wallets help protect a user’s private keys (transaction data codes) from hackers.
Research
Stablecoins are becoming an increasingly popular investment vehicle leading to a growth in the volume of information available online. Popular research articles include ‘Stablecoins: A Brave New World’, ‘Stablecoins: The Quest for a Low- Volatility Cryptocurrency’, and ‘Stablecoins: Use Cases and, Stablecoins for Dummies.’ Prospective investors can also make use of online lists that publish data on popular assets, including CoinMarketCap.
Pros Of Stablecoins
Reasons to start buying and selling stablecoins include:
- Crypto technology – Retains the secure nature of cryptocurrencies by executing transactions on the blockchain
- Online information – Traders can educate themselves with the wealth of free online articles and reports
- Hybrid asset class – A medium of exchange that bridges the gap between fiat currency and altcoins
- Earn interest – Interest rates on stablecoins are typically greater than high-yield savings accounts
- Less volatile – Stablecoins offer a safer alternative to day trading erratic cryptos like Bitcoin
Cons Of Stablecoins
There are also some drawbacks to buying, lending and selling stablecoins:
- Unclear tax policies – Charges and taxes may apply when trading stablecoins
- Complex setup – The novel nature and differences of this emerging crypto class may deter investors new to altcoins
- Centralisation – The central influence of fiat or commodity-backed stablecoins arguably contradicts the decentralised nature of cryptocurrencies
- Profit potential – The stable nature of these coins means reduced price swings and trading volumes which may limit the profit a day trader could generate, for example. Instead, investing in stablecoins is likely a longer-term game
- Transparency – As highlighted by the Tether lawsuit, some companies issuing and selling stablecoins may be untrustworthy. This lack of transparency can affect the value of coins and impact investor confidence
- Global market regulation – The world, including the UK, is still grappling to introduce rules and regulations to monitor the use of cryptocurrencies. Aside from differing rules, it’s difficult to predict what the future holds for cryptos and stablecoin stock which makes it challenging to forecast their future value. Keep an eye on news announcements from the likes of Rishi Sunak, Chancellor of the Exchequer, who has been involved in potential crypto risks and regulations.
Final Word On Stablecoins
Despite some challenges, trading stablecoins is on the rise. They are emerging as a prominent class of cryptocurrencies that aim to bring stability to a hugely volatile marketplace while retaining the flexibility and underlying technology behind altcoins. Several exchanges offer the best stablecoins in 2026, with Coinbase topping our list of recommended brokers.
FAQ
How Do Stablecoins Work?
A stablecoin is a crypto whose market value is tied to an external asset. These assets can be a currency (fiat), commodity (gold), or another digital currency (Bitcoin). The most common stablecoins are USD-backed coins. A reserve of the asset is held by the issuing company.
Are Stablecoins Safe?
Stablecoins retain the same level of security as other cryptos by using blockchain technology but are more stable because they’re tied to a robust reserve asset like gold. The reserve is held by a third party meaning some stablecoins retain an element of decentralisation.
Are Stablecoins Taxable?
The tax treatment of stablecoins and cryptos varies from country to country. In the UK, for example, gains from crypto trading are usually subject to capital gains tax. It could be worth seeking professional tax guidance before you start buying and staking stablecoins.
Are Stablecoins Decentralized?
It is debatable as to what extent stablecoins are decentralized. It can be argued that because the digital currencies are pegged to assets controlled by central banks and governments, such as fiat currency, they are not decentralised. With that said, they can still sit on a decentralised blockchain ledger. As a result, it’s more accurate to say they retain some decentralised qualities but are less so than pure cryptos like Bitcoin (BTC), Stellar (XLM), or Ethereum (ETH).