What Stablecoins on Liquid Are
A stablecoin is a token designed to hold a steady value against a reference such as the U.S. dollar. On the Liquid Network, stablecoins are issued as Liquid assets and move with the same speed and privacy properties as Liquid bitcoin (LBTC), the network's native asset. The most widely used stablecoin on Liquid is USDT, issued by Tether, which has been issued on Liquid since 2019 and is the largest stablecoin on the network by value.
Liquid is a Bitcoin layer-2 sidechain. Rather than securing itself with proof-of-work mining, it uses a distributed federation of exchanges, trading desks, wallets, and infrastructure providers that validate and sign blocks. That design gives Liquid fast, deterministic block production and a settlement model built for financial assets. Stablecoins are one of several asset classes Liquid supports; the network also carries promissory notes, security tokens, and other tokenized instruments. To understand the underlying mechanics, see how the Liquid Network works.
For a business, a stablecoin on Liquid is a way to hold and move dollar-referenced value on a network that settles in about one minute and keeps amounts confidential. That combination separates Liquid from both the Bitcoin base layer, where amounts are public and blocks take roughly ten minutes, and from general-purpose chains where balances and transfers are broadcast openly.
A stablecoin on Liquid involves two separate trust layers. The Liquid Network secures settlement through its federation, which validates and signs blocks and holds the bitcoin backing LBTC. The token's value depends on its issuer: a fiat-referenced stablecoin holds its peg only while the issuer maintains sufficient reserves and honors redemptions. Liquid's speed and confidentiality do not remove that issuer and reserve risk, so a stablecoin on Liquid is not risk-free.
Stablecoins Among Liquid's Issued Assets
Liquid supports several classes of issued asset, and stablecoins sit within that broader set. The network distinguishes between permissionless assets that anyone can hold and managed assets that an issuer controls through whitelisting and transfer rules.
| Asset class on Liquid | What it is | Issuer control |
|---|---|---|
| Standard Liquid assets | Permissionless, confidential assets anyone can hold and transfer | None after issuance |
| Issuer-tracked assets (AMP) | Assets where the issuer can monitor ownership, reissuance, and burns | Ownership tracking and lifecycle management |
| Transfer-restricted assets (AMP) | Assets that move only between approved, whitelisted holders | Transfer restrictions enforced by category and whitelist |
A stablecoin can be issued in any of these models depending on the issuer's regulatory needs. A widely circulated stablecoin like USDT trades broadly; a stablecoin built for a closed group of approved counterparties can use the transfer-restricted model so it only moves between whitelisted holders.
Why Liquid for Stablecoin Settlement
The case for settling stablecoins on Liquid rests on four properties: confidentiality, fast deterministic finality, the absence of a competitive fee auction, and built-in controls for regulated issuance. Each addresses a problem a business runs into when moving dollar-referenced value at scale.
Confidential Transactions Hide Amounts and Asset Types
Every transaction on Liquid is confidential by default. Confidential Transactions hide both the amount transferred and the asset type from anyone watching the network, while still letting every node verify that no value was created out of thin air. The mechanism combines Pedersen commitments, which blind the amount using elliptic-curve mathematics, with range proofs that prove a committed amount is valid without revealing it.
For a business, this means a stablecoin transfer does not broadcast its size or the balances of the parties involved. A treasury moving funds, a desk settling a trade, or a company paying a supplier does not expose that activity to competitors, counterparties, or the public. When disclosure is required, the sender and receiver can share blinding keys with an auditor or regulator, which grants selective visibility without making the data public. The full mechanics are covered in what Confidential Transactions are.
Fast Blocks and Deterministic Finality
Liquid produces a block roughly every minute, and its federated consensus gives deterministic finality: there is no risk of the multi-block reorganizations that probabilistic, proof-of-work chains carry. A single confirmation is final under the federation's signing model, though some applications wait for a second confirmation as conservative practice. Compared with the Bitcoin base layer's roughly ten-minute blocks and probabilistic finality, this shortens the time a business waits before treating a stablecoin transfer as settled.
No Fee-Auction Front-Running
On networks that order transactions through a competitive fee auction, pending transfers sit in a public mempool with their amounts visible before they are mined, which can expose intent and invite front-running. Liquid orders transactions through the federation's fixed block schedule rather than a competitive fee market, so in practice fee bidding does not reorder or delay a transfer. Liquid still relays pending transactions through a mempool, but Confidential Transactions hide the amount and asset type, so an observer cannot see how much a pending transfer moves or which asset it carries. For a business moving size, that removes a category of information leakage that open, public-amount mempools carry.
Controls for Regulated Issuance
Liquid's digital securities and managed-asset capabilities let an issuer enforce who may hold and receive an asset. Through AMP, Blockstream's asset management platform on Liquid, an issuer can define transfer restrictions and whitelisting, so a regulated stablecoin moves only between approved holders. These controls operate on top of Confidential Transactions, so an issuer gets both compliance enforcement and transaction privacy.
Business Use Cases for Stablecoins on Liquid
The properties above map onto several concrete business needs. Stablecoins on Liquid are used wherever a business wants dollar-referenced value to move quickly and privately, with optional issuer control.
Treasury Settlement
A treasury team can hold and move dollar-referenced value on Liquid without exposing balances or transfer sizes. Fast finality means funds are available for use within about a minute, and confidentiality keeps treasury activity off a public ledger. Because Liquid carries both bitcoin and stablecoins, a treasury can shift between LBTC and a stablecoin on the same network when it wants to reduce or take on price exposure.
B2B Payments
For business-to-business payments, a stablecoin on Liquid settles in about one minute at low cost, which suits supplier payments, intercompany transfers, and cross-border settlement where bank rails are slow or expensive. The confidentiality of the transfer means invoice amounts and payment volumes are not broadcast publicly. To see how these rails compare to traditional ones, see what payment rails are.
Trading-Desk Transfers
Trading desks move stablecoins between venues to fund positions and settle trades. On Liquid, those transfers settle fast and without revealing size to the public mempool, which limits the information a desk leaks while repositioning. The network's support for fast, self-custodial swaps between assets on the same chain also lets desks move between a stablecoin and other Liquid assets in a single atomic transaction.
Tokenized Fiat Rails
Beyond a single stablecoin, Liquid is a settlement layer for tokenized fiat and other instruments. The same issuance and transfer-control machinery that supports a stablecoin also supports promissory notes, security tokens, and other tokenized assets, letting a business build dollar-referenced rails alongside other financial instruments on one network. For a wider view of what Liquid supports, see what you can do on Liquid, and for tokenized instruments specifically, see what tokenized securities are.
How AMP Supports Regulated Stablecoin Issuance
A stablecoin built for regulated use has to control who can hold it. AMP provides that control through two managed-asset models layered on top of the network's confidential base.
Issuer-tracked assets let an issuer monitor ownership and manage the asset's lifecycle: reissuance to increase supply, burns to remove supply, and reporting on who holds what. Transfer-restricted assets go further: they move only between holders the issuer has approved, with restrictions enforced by category so an asset cannot reach an unapproved address. An issuer can use these models to keep a stablecoin within an accredited or whitelisted group while every transfer remains confidential to outside observers.
Because the restrictions are enforced as part of the asset's transfer rules, an issuer does not have to choose between compliance and privacy. The amount and asset type stay hidden by default, and the issuer retains the ownership tracking and transfer control that regulated issuance requires. For businesses that need custody, treasury workflows, and asset issuance together, Blockstream Enterprise brings these capabilities into a single platform with policy-based approval workflows and on-chain verifiable reserves.
Fees and Cost of Stablecoin Transfers
Liquid transaction fees are paid in Liquid bitcoin and are low by design, averaging a fraction of a satoshi per virtual byte. Historically, confidential transactions cost more than public ones because the cryptographic commitments and proofs that provide privacy made the transactions larger. The ELIP 200 upgrade narrowed that gap.
ELIP 200 (deployed in January 2025) introduced a discounted fee calculation for Confidential Transactions, reducing their fees substantially (see the ELIP 200 proposal) and narrowing the historical gap with public transactions. A confidential USDT transfer on Liquid settles for roughly a few cents. Costs may vary with network conditions, but stablecoin settlement on Liquid is inexpensive relative to its speed and privacy.
| Property | Liquid stablecoin transfer |
|---|---|
| Block time | About one minute, deterministic finality |
| Amount and asset visibility | Hidden by default via Confidential Transactions; selectively disclosable with blinding keys |
| Fee | Paid in Liquid bitcoin; confidential transaction fees reduced substantially by ELIP 200 |
| Issuer control | Optional whitelisting and transfer restrictions via AMP |
How Liquid Compares to Stablecoins on General-Purpose Chains
Stablecoins also circulate on general-purpose smart-contract chains, and the comparison is about design priorities rather than any single chain. Liquid is purpose-built for the confidential settlement of financial assets, and that focus produces different defaults from a general-purpose programmable chain.
The first difference is privacy. On most general-purpose chains, balances and transfer amounts are recorded openly, so anyone can read how much a holder owns and how much each transfer moved. On Liquid, amounts and asset types are hidden by default, with selective disclosure available when an auditor or regulator needs it. A business that does not want its stablecoin balances and flows visible to the public starts from a confidential baseline.
The second difference is settlement behavior. Liquid produces blocks on a fixed schedule of about one minute with deterministic finality and no miner-driven fee auction, and Confidential Transactions keep the amounts of pending transfers hidden. General-purpose chains often order transactions through a competitive fee market, which can make costs variable and expose pending transfer amounts before they settle. The third difference is scope: a general-purpose chain runs arbitrary smart contracts across many use cases, while Liquid concentrates on issuing and settling assets, including stablecoins, with issuer controls built into the asset model through AMP.
Neither approach is universally better; they optimize for different things.
Frequently Asked Questions
What stablecoins are available on the Liquid Network?
USDT, issued by Tether, is the largest stablecoin on the Liquid Network by value. Liquid also supports a range of other issued assets, including promissory notes, security tokens, and other tokenized instruments. Any issuer can create assets on Liquid, and AMP-managed assets add transfer restrictions and ownership tracking for regulated issuance.
Why settle stablecoins on Liquid instead of a general smart-contract chain?
Liquid confirms blocks in about one minute with deterministic finality, applies Confidential Transactions that hide amounts and asset types by default, and orders transactions on a fixed federation schedule rather than a competitive fee auction. For a business, that means fast, private settlement of dollar-referenced value without broadcasting balances or trade sizes to the public, anchored to Bitcoin through a layer-2 sidechain.
Are stablecoin amounts on Liquid public?
No. Liquid applies Confidential Transactions by default, so transaction amounts and asset types are hidden from outside observers while every node still verifies the transaction is valid. The sender and receiver can grant selective access to auditors or regulators using blinding keys, which keeps balances private while preserving the ability to disclose when it is required.
How does a regulated issuer control who holds a stablecoin on Liquid?
Through AMP, Blockstream's asset management platform on Liquid. AMP supports transfer-restricted assets that move only between approved, whitelisted holders, and issuer-tracked assets that let an issuer monitor ownership, reissuance, and burns. These controls support regulated issuance while transactions stay confidential to outside observers.
What does a stablecoin transfer cost on Liquid?
Liquid fees are low and paid in Liquid bitcoin. After the ELIP 200 upgrade in January 2025, confidential transaction fees fell substantially, bringing a confidential USDT transfer to roughly a few cents. Costs may vary with network conditions, but settlement on Liquid is designed to be inexpensive relative to its speed and privacy.