Stablecoins are not cash: the main categories of risk

A stablecoin aims to maintain a target value, but its peg mechanism does not make it equivalent to a bank deposit or physical cash. Risk depends on the collateral model and surrounding infrastructure.

For centralized stablecoins, reserve quality, issuer rules, address-freezing powers and redemption access matter. Decentralized models add collateral, oracle and smart-contract risks.

The same token may exist on several networks. Network-selection errors, bridges and wrapped versions introduce separate technical risks.

For meaningful balances, consider liquidity, reserve transparency, depeg history and your dependence on a particular network or venue.