Stablecoins Explained: Why USDT/USDC Are Used for Escrow

If you're new to crypto, the idea of paying with digital currency can feel riskier than it needs to be — mostly because of price volatility. Stablecoins solve exactly that problem, which is why RahaKaitse relies on them for escrow deposits.

What is a stablecoin?

A stablecoin is a cryptocurrency designed to hold a stable value, usually pegged 1:1 to a real-world currency like the US dollar. USDT (Tether) and USDC (USD Coin) are the two most widely used stablecoins, each backed by reserves intended to match the number of tokens in circulation.

Why volatility matters for escrow

Regular cryptocurrencies like Bitcoin or Ethereum can rise or fall significantly in value within hours. If your escrow deposit were held in a volatile coin, the amount locked at deposit time could be worth noticeably more or less by the time it's released — creating disputes that have nothing to do with the actual item being traded. Stablecoins remove that variable entirely: 100 USDT deposited today is still worth approximately 100 USDT (and roughly $100) whenever it's released.

Why this matters for both sides

• Buyers know the exact value they're depositing won't shrink while waiting for delivery confirmation.
• Sellers know the amount they'll receive won't be worth less than what was agreed, even if the transaction takes a few extra days to complete.

Getting started

You'll need a crypto wallet that supports USDT or USDC on the network RahaKaitse uses, with enough balance to cover the deposit plus a small network fee. If you're unfamiliar with crypto wallets, our knowledge base has a general introduction to getting set up before your first escrow transaction.