Zucoin vs Stablecoins: Key Differences Compared

8 June 2025

Stablecoins are typically blockchain-based tokens built to stay at $1, giving users low-volatility 'digital cash' for trading and payments. Zucoin is different: it doesn't peg its price to any asset or currency, allowing for a free market price like Bitcoin, and has zero in-built transfer fees on its Splitchain network.

Quick summary

• Stablecoins stay near $1 by holding cash, bonds or crypto collateral.
  
  
• Zucoin is a token on Splitchain with zero built-in network fees.
  
  
• Stablecoins trade price stability for reliance on collateral and issuers.
  
  
• Think of Stablecoins as 'digital cash' that is often pegged to a government's currency, eg USD, and are more of a competitor to banks and Visa/Mastercard, not necessarily a "cryptocurrency".
  
  
• Zucoin targets everyday self-managed abilties without reliance on issuers.
  
  
• Top stablecoins like Tether's USDT and Circle's USDC make up >90% of the growing $200B+ stablecoin market.
  
  

What are stablecoins?

A stablecoin is a digital token built to stay at $1, hence the term "stable".

Top stablecoin issuers hold U.S. Treasury bills, cash or over-collateralised crypto to back every token.

What are stablecoins used for?

Stablecoins serve as a bridge between traditional finance and crypto, acting like a "sandwich" or "middle man" that helps users move between local currencies and the broader cryptocurrency ecosystem.

This is referred to as an "on/off-ramp" gateway.

Initially designed as fast intermediaries for crypto trading, stablecoins have evolved to directly compete with local currencies as their functionality expands and mainstream support grows.

Key use cases include:

• On/off-ramp gateway: Convert local currency to crypto and back without volatile price swings.
  
  
• Cross-border remittances: Send "digital dollars" globally faster and cheaper than traditional banking.
  
  
• Trading intermediary: Park funds between crypto trades without returning to fiat currency.
  
  
• DeFi backbone: Power lending, borrowing and yield farming in decentralised finance.
  
  
• Business treasury: Companies hold stablecoins as digital cash reserves.
  
  
• Local currency alternative: In countries with unstable currencies, stablecoins offer USD-denominated stability.
  
  
• Payment processing: Lower fees and reduced chargeback/reversal risk compared to Visa/Mastercard/Amex.
  
  

Why do people use stablecoins?

• Familiar dollar denomination: Simplifies pricing and accounting.
  
  
• Deep liquidity: Stablecoins are widely traded on exchanges and in DeFi apps.
  
  
• Hedge volatility: Traders park funds in stablecoins to avoid wild crypto price swings.
  
  
• 24/7 digital dollars: Stablecoins let you send 'digital dollars' anytime worldwide without a bank.
  
  
• No chargebacks: Unlike bank transfers or Visa/Mastercard payments, stablecoin transactions are typically irreversible, reducing fraud risk for merchants.
  
  
• Earn yield: Some DeFi (decentralised finance) platforms pay interest for lending stablecoins.
  
  

Tip: Fiat currency simply means government-issued money like USD, EUR or AUD.

What is Zucoin?

Zucoin is a crypto token running on a cutting-edge ledger technology called Splitchain.

Rather than broadcasting every transaction to every node, Splitchain splits data between sender & receiver.

Splitchain also offloads most processing to the Zucoin wallet itself, unlike traditional centralised networks.

This results in lighter, faster and low-cost parallel transaction settlements.

Zucoin vs stablecoins: Benefits and risks compared

Zucoin benefits

• Settlement finalises in seconds, with no reversal risk due to Splitchain's 2-factor authentication mechanism.
  
  
• Zero in-built fees enable micro-payments.
  
  
• Self-custody, Zucoin wallet users hold and manage their own Zucoin encryption proofs.
  
  
• Parallel processing enables higher transaction throughput compared to sequential blockchain networks.
  
  
• Fixed supply cap of 100 million Zucoin prevents value dilution from inflation.
  
  
• Direct peer-to-peer transfers without third-party approval or oversight.
  
  

Zucoin risks

• Free-floating prices are more volatile than stablecoins.
  
  
• Ecosystem is earlier-stage with fewer third-party integrations.
  
  

Stablecoin benefits

• Pegged 1:1 value aids accounting and reduces trading volatility.
  
  
• Familiar dollar denomination simplifies pricing.
  
  
• Deeper liquidity on exchanges and in DeFi apps.
  
  
• Stablecoins became the backbone of decentralised finance for lending and trading as a bridge between traditional finance and crypto.
  
  
• Businesses use stablecoins to bypass slow traditional banking.
  
  
• Major corporations now hold USDC for treasury management.
  
  
• Improving regulations boost everyday use and confidence in stablecoins.
  
  

Stablecoin risks

• 1:1 peg failures can erase billions, e.g. Terra Luna collapse in 2022.
  
  
• Inflation risk as dollar-pegged tokens lose purchasing power as their denominated currency, e.g. USD, inflates over time.
  
  
• No fixed supply, meaning issuers can mint unlimited tokens, diluting value.
  
  
• Issuers can freeze addresses, leading to censorship and surveillance risk.
  
  
• They might eventually lead to CBDCs, which are Central Bank Digital Currencies, further increasing monetary centralisation.
  
  
• Network fees vary with underlying host blockchain, e.g., Ethereum gas price fees can spike.
  
  

Stablecoin market size

The stablecoin market has grown from $5 billion in early 2020 to over $200+ billion, representing explosive growth in just a few years.

There are a number of stablecoins, but two of the biggest are:

• USDT (USD Tether): Currently the biggest stablecoin. Issued by Tether Ltd, backed by ~$120B in US Treasuries.
  
  
• USDC (USD Coin): Second largest stablecoin, issued by Circle, backed by 100% cash + short US Treasuries.
  
  

Tip: Market cap and market share figures fluctuate daily. At time of writing, USDT dominates with ~70% market share, while USDC holds ~20%.

Is Zucoin a stablecoin?

No. Zucoin's price floats with supply and demand, whereas stablecoins aim to hold $1.

How is Zucoin different from USDT or USDC?

Stablecoins like USDT and USDC hold dollar reserves and other assets to keep $1 price point stable.

Zucoin has no managed price peg, allowing its price to float with supply and demand, like Bitcoin.

What happens if a stablecoin loses its peg?

Its value can crash, as seen in Terra's 2022 collapse.

Ready to explore Zucoin?

Download the Zucoin wallet app.

Read the developer docs.

Zucoin features for everyday use.

Zucoin features for businesses.

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Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.