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Introduction
Stablecoins offer the benefits of crypto, fast transfers, global access, and 24/7 availability, without the extreme volatility of coins like Bitcoin or Ethereum. Pegged to fiat currencies like the U.S. dollar, stablecoins have become essential tools for traders, savers, and everyday users.
This guide explains how to buy stablecoins safely, efficiently, and with minimal fees.
Types of Stablecoins: Which One Should You Buy?
USDC (USD Coin)
Fully backed by U.S. dollars and short-term government bonds
Issued by Circle and supported by Coinbase
Regularly audited and widely accepted across centralized and decentralized platforms
Ideal for users who value transparency and regulation
USDT (Tether)
The most traded stablecoin by volume
Backing details remain controversial, but liquidity is unmatched
Available on nearly every exchange
Best for high-volume trading and cross-exchange transfers
DAI
A decentralized stablecoin backed by crypto collateral via the MakerDAO protocol
No central issuer, which appeals to DeFi users
More complex but favored for privacy and decentralization
PYUSD (PayPal USD)
Issued by PayPal and tightly integrated into its platform
Easiest stablecoin to buy if you already use PayPal
Limited in use outside the PayPal ecosystem
Good for beginners who want a simple entry point
Where to Buy Stablecoins
Centralized Exchanges
Coinbase: Beginner-friendly, USDC-friendly, strong regulatory standing. Offers free USD-to-USDC conversions.
Kraken: High security and transparency. Supports multiple stablecoins with margin trading options.
Fintech Platforms
PayPal: Easiest way to buy PYUSD. Perfect for first-timers who want simplicity.
Robinhood: Limited stablecoin options but good for those who want stocks and crypto in one place.
Decentralized Exchanges (DEXs)
Uniswap: Non-custodial and censorship-resistant. Best for DeFi users who value privacy and self-custody. Not beginner-friendly due to gas fees and wallet setup.
How to Buy Stablecoins: Step-by-Step
1. Create an Account
Sign up on your chosen platform. Most require ID verification (KYC), including a government-issued ID and sometimes proof of address.
2. Fund Your Account
ACH bank transfers: Low fees, slow (3–5 days).
Debit/Credit cards: Instant but expensive (1.5–4% fees).
Wire transfers: Good for large sums but come with higher fees.
3. Buy the Stablecoin
Use a market order for instant purchase or a limit order to set a specific price. For stablecoins, market orders are usually sufficient.
Storage and Security: Where to Keep Your Stablecoins
Exchange Wallets
Convenient but risky. Exchanges can be hacked or face regulatory shutdowns.
Self-Custody Wallets
Hardware wallets (e.g., Ledger, Trezor): Most secure, best for long-term holding.
Software wallets (e.g., MetaMask): Good balance for active users or DeFi participation.
Security Tips
Use two-factor authentication (2FA).
Never reuse passwords. Use a password manager.
Avoid phishing scams. Double-check all URLs and sender info.
Fees: How to Minimize Costs
Trading Fees
Range from 0.1%–1.5%. Volume traders often get discounts.
Coinbase charges higher fees but offers zero-fee USDC conversions.
Withdrawal Fees
Can range from free to $25+, depending on the platform and congestion.
Money-Saving Tips
Use ACH transfers when time allows.
Time purchases during off-peak hours to reduce network fees.
Watch for promotions offering fee discounts.
Avoid These Common Mistakes
Buying during congestion: Ethereum-based stablecoins (like USDC) can get costly to transfer.
Assuming all stablecoins are equal: Each has different backing, use cases, and platform support.
Skipping security: Always set up 2FA and understand wallet recovery processes.
Tax Implications of Buying Stablecoins
Stablecoin transactions are not tax-exempt. The IRS treats them like any crypto, meaning trades, even between stablecoins, can trigger taxable events. Keep clear records of dates, amounts, and transaction purposes. Use crypto tax software or consult a professional if your activity is substantial.
Which Platform Is Right for You?
For Simplicity: Choose a fintech platform you already use such as Robinhood or PayPal if you're brand new to crypto.
For Balance: Coinbase offers ease of use, regulatory peace of mind, and deep USDC support.
For Power Users: Coinbase and Kraken offer more coins and lower fees if you're comfortable with advanced interfaces.
Conclusion
Stablecoins have become a key entry point into the world of crypto. Whether you're protecting gains, exploring DeFi, or sending money globally, knowing how to buy and store stablecoins safely is important.
About Arch
Arch is building a next-gen wealth management platform for individuals holding alternative assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrency investments are volatile and risky. Always conduct your own research before making investment decisions.