A stablecoin backed by cash, bank deposits, and short-duration government debt held offchain by a custodian.
Fiat-backed stablecoins hold reserves of cash, cash-equivalents and short-duration US Treasuries at regulated custodians. Each token in circulation is redeemable 1:1 for the reserve asset, subject to the issuer's KYC and jurisdictional constraints. USDT (Tether), USDC (Circle), PYUSD (PayPal), and RLUSD (Ripple) are all fiat-backed. Quality depends on the auditor, the custodian mix, and the geographic profile of the deposits.