Are stablecoins cash? How to count USDT and USDC

If you hold USDT or USDC, you've probably wondered where they belong. Are they crypto, because they live on an exchange? Or cash, because one coin is meant to be worth one dollar? For tracking your money, the practical answer is: keep them next to your cash, but know the difference.

What is a stablecoin?

A stablecoin is a digital token designed to keep a steady price, usually 1 token = 1 US dollar. The two biggest are USDT (issued by Tether) and USDC (issued by Circle). Their issuers say each coin is backed by reserves such as cash and short-term government bonds.

Unlike Bitcoin, the point of a stablecoin is that its value doesn't move much. People use them to park money between trades, send dollars abroad quickly, or hold dollars when their bank only offers another currency.

Why keep them next to your cash?

• They're designed to hold their value. A dollar stablecoin aims to stay at a dollar, so lumping it in with volatile crypto makes your crypto look bigger and riskier than it is.
• You use them like cash. They're money you can spend, send or move quickly, not a long-term bet.
• It shows your real safety net. "How much could I use tomorrow?" should include stablecoins you hold.

But they're not the same as a bank account

Be clear-eyed about the differences:

• No deposit insurance. Bank deposits are often covered by a government guarantee scheme up to a limit. Stablecoins aren't.
• The peg can slip. Stablecoins have briefly traded below $1 in the past during market stress. What happens in a depeg.
• Where you hold them matters. Coins on an exchange depend on that exchange staying healthy. Coins in your own wallet depend on you keeping your keys safe.
• They're in dollars. If you think in euros or pounds, the value moves with the exchange rate.

A sensible way to track them

Keep stablecoins in their own line, next to your bank accounts, and show the total of both as cash and stablecoins. Then convert everything into your currency at today's rate.

Sample figures, for illustration.

This way you see your real cash position, and you can still see how much of it sits outside the banking system.

How LedgerVault handles it

LedgerVault's stablecoin tracker shows USDT, USDC and other major stablecoins next to your bank accounts, valued at their live market price, so a depeg shows up in your total. They still appear as their own line, so you always know what's where. See how they fit into your full picture in how to calculate your net worth.