Definition
A fiat-referenced token is a digital asset designed to maintain a stable value relative to one or more official (fiat) currencies. The token achieves this stability through reserve backing — holding assets denominated in or equivalent to the referenced fiat currency — combined with a redemption mechanism that allows holders to exchange tokens for the underlying currency at par value.
Regulatory Classification
Under the EU Markets in Crypto-Assets Regulation (MiCA), fiat-referenced tokens are classified as e-money tokens (EMTs) when referencing a single official currency. Tokens referencing multiple currencies or a basket of assets fall under the broader asset-referenced token (ART) classification.
In the United States, pending stablecoin legislation would classify fiat-referenced tokens as payment stablecoins, subject to federal reserve requirements and issuer licensing.
Common Terminology
The term “fiat-referenced token” is used interchangeably with:
- Stablecoin — the most common market term
- E-money token (EMT) — MiCA regulatory terminology
- Payment stablecoin — proposed US legislative terminology
- Fiat-backed token — informal market terminology
Key Characteristics
- Price stability: Designed to maintain a 1:1 peg with the referenced fiat currency
- Reserve backing: Collateralised by assets including government securities, cash deposits, and other high-quality liquid assets
- Redemption rights: Holders can redeem tokens for the underlying fiat currency, typically at par value
- On-chain transferability: Operate as blockchain-native tokens (typically ERC-20, TRC-20, or SPL standards)
- Issuer obligation: A centralised entity is responsible for maintaining the peg, managing reserves, and honouring redemptions
Major Fiat-Referenced Tokens
| Token | Issuer | Reference Currency | Supply (Feb 2026) |
|---|---|---|---|
| USDT | Tether | US Dollar | $144.6B |
| USDC | Circle | US Dollar | $61.3B |
| FDUSD | First Digital | US Dollar | $3.2B |
| PYUSD | PayPal/Paxos | US Dollar | $1.1B |
| EURC | Circle | Euro | $0.8B |
| EURCV | SocGen Forge | Euro | $0.3B |
Distinction from CBDCs
Fiat-referenced tokens are privately issued digital assets. Central bank digital currencies (CBDCs) are issued directly by central banks and constitute legal tender. While both reference fiat currency values, they differ fundamentally in issuer type, legal status, and monetary policy implications.