Stablecoins are less volatile than typical crypto because they are backed by the US dollar. Because of that, people think they can store stablecoins as usual money, but this is a total delusion.

In this article, we'll break down reliable ways to store stablecoins without sacrificing security and comfort. Besides, we'll discuss best practices from the richest crypto holders.

Key takeaways

• A stablecoin is not a digital dollar. It is a promissory note of the issuer (Tether, Circle, PayPal). The dollar sits in the company’s account, not inside the token.
• You are carrying three risks at once: your key, the issuer, and the freeze function.
• Even the richest holders lose money: Mark Cuban to a fake MetaMask, Alex Choi to a fake video call, Kevin Durant to a locked exchange account.
• There is no single safe place. The only working strategy is diversification of storage: an exchange only for buying and selling, a hardware wallet for the bulk, a self-custodial hot wallet for daily use.

What's the difference between stablecoins and classic cryptocurrencies

Stablecoins and "regular" cryptocurrencies are stored in the same way, but they have completely different risks.

Bitcoin or Ethereum is a bearer asset. No one but the key holder can get access to it. One risk: losing or stealing the key.

A stablecoin is a promissory note of the issuing company (Tether, Circle, PayPal). Yes, it’s considered that stablecoins are crypto that is backed by dollars. But being backed by dollars and consisting of dollars are different things.

Read more: Which Stablecoin Is Best for Everyday Use? USDT, USDC, FRNT, USAT or DAI?

The dollar is not inside the token. The dollar is in Circle’s or Tether’s account, and the token is a record of the company’s debt to you. Tether USDT’s reporting reflects this: the reserves are in the assets, and the issued USDT is in the liabilities. It is a liability to you. This is the literal definition of a promissory note.

An analogy is a number in a coat closet. The number is "secured" by your coat by 100%, but the coat is with the coat check. If the wardrobe burns down or the attendant decides not to give it to you, the number will remain, but the coat will not.

From here we have three levels of risk

1. The key: it’s the same as for any other crypto.
2. The issuer: if the reserves are not as stated, or the company is sanctioned, your token will be devalued, no matter where it’s stored. A cold wallet doesn’t protect against this.

For example, in March 2023, Chainalysis reported that Circle disclosed that $3.3 billion of USDC reserves were stuck in the collapsed Silicon Valley Bank, and USDC fell to about $0.87 over the weekend. Nobody’s private keys were touched.

3. Address freezing: USDT and USDC have a blacklist feature directly in the smart contract. The issuer can freeze your tokens on your own hardware wallet, and you cannot do anything about it. Bitcoin doesn’t have this mechanism.

And this is not theory: between 2023 and 2025, Tether blacklisted 7,268 addresses holding about $3.29 billion, and Circle blacklisted 372 addresses holding about $109 million. There is no warning and no appeal before the freeze.

Read more: Where to buy and trade USDT in Europe and the UK after Revolut Tether delisting

That's why we should store stablecoins a little bit another way. First of all, let's look at best crypto security practices from the richest people in the world.

How the rich store their crypto and their failures

The kind reminder: the ideal 100% method to store crypto safely doesn't exist. You can only reduce the likelihood of risk.

Hot wallets

Billionaire Mark Cuban: the fake wallet

He used to store his crypto on a hot wallet, MetaMask, but all assets had been stolen. Mark Cuban claimed he just downloaded a scam version of the wallet from Google.

In September 2023 around $870,000 was drained from his wallet in about ten minutes: ETH, USDC, USDT, staked ETH, MATIC and a few other tokens. The wallet had been sitting untouched for roughly five months, and the drain was noticed by an on-chain researcher, not by Cuban himself. He managed to move about $2 million in USDC to Coinbase before more was taken.

The lesson is boring and that is exactly the point: a billionaire lost almost a million dollars because of one search result. Never install a wallet from a Google ad or a random link. Go to the official domain, bookmark it, and use only the bookmark.

Alex Choi: the fake video call

Alex Choi, co-founder of Fortune Collective and a well-known face in crypto. He stored his funds in several hot wallets on his computer. Scammers reached him through a DM on X from a project he already had connections with, ostensibly for cooperation, and pushed him into a video call. There he was asked to install a "fix" for an audio problem. In reality, a trojan that gave the attackers control of his machine. He lost about $1 million in September 2025.

Practical takeaways: never install anything during a call, keep the wallet on a device that is not used for meetings, and switch off remote-control requests in your video app.

Hardware wallets

Snoop Dogg: right device, wrong place

You’ll laugh at this, but Snoop Dogg is probably using the safest way to store his crypto, a Ledger hardware wallet. He even has a custom gold Ledger Nano X with black diamonds and the Death Row Records logo, which he wore around his neck while hosting WrestleMania 39 in 2023. Drake and Gunna have shown off similar custom devices.

But for a regular person, it is a terrible idea. The device itself is fine, wearing it as an accessory is not. You are publicly announcing that you hold crypto and that the key is physically on your body. That is an invitation for a "$5 wrench attack", the oldest and least technical way to lose everything.

The rule for normal people is the opposite: never talk about the size of your holdings, and keep the device boring and out of sight.

Centralized platforms

NBA star Kevin Durant: the exchange that kept his keys

Kevin Durant bought Bitcoin on Coinbase around 2016 at roughly $650 per coin and then lost access to his own account for almost ten years. He simply couldn’t pass the recovery procedure. He got the account back only in September 2025, after his agent joked about the problem on stage at a CNBC conference and the CEO of Coinbase personally replied that the recovery was complete.

The funny part is that Durant made money on this: Bitcoin went from $650 to more than $115,000 while he was locked out. The unfunny part is that he had zero control over that outcome. Ten years of "forced hodling" could just as easily have been ten years of watching the price fall with no ability to sell.

If you don’t hold the keys, you don’t decide when you exit. And for stablecoins, this matters even more, because there is no upside to waiting for a frozen dollar to stay a dollar.

Complex storage methods

Vitalik Buterin, a co-founder of Ethereum, is a big fan of complex storage methods, for example, a multisig wallet.

A multisig wallet requires multiple private key signatures to approve transactions. Think of it like a shared bank account. You need a set of account holders to approve the payment before it goes through.

In a Reddit post from 2023, he wrote that he keeps the bulk of his own funds in a multisig wallet, as does the Ethereum Foundation.

His rules for choosing the guardians are worth stealing: guardians should ideally not know each other, they should be spread across different countries, different devices and different operating systems, and they should verify your identity with a security question before approving anything.

His recommendation is social recovery for hot wallets with a small part of the funds, and multisig for cold storage with the savings.

Disadvantages: multisig wallets aren’t as safe as people think. The added complexity and reliance on third-party services have additional risks. For example, the $1.5 billion Bybit hack in February 2025: the largest crypto theft in history. Hackers modified a transaction on the multisig website they were using and drained the entire account, sending the funds to their own wallets. It was possible because Bybit used a third-party multisig interface to sign transactions called Safe{Wallet}.

The safest way to store stablecoins is through diversification of storage

The idea is simple: no single place holds everything, and no single mistake costs everything. In practice it means three layers, each with its own job.

Read more: Crypto Was Stolen: Complete Action Plan for 2026

Layer 1. Crypto exchanges for buying and selling, not for storing

An exchange is a gateway between the banking system and the blockchain. That is the whole job. Money passes through it, it doesn’t live there. Kevin Durant’s story is the polite version of what an exchange can do to you; FTX was the impolite one.

• Withdraw to your own wallet after the trade is done, not "next week".
• Turn on 2FA in an authenticator app, not by SMS, SIM swap is a real and cheap attack.
• Enable the withdrawal address whitelist and an anti-phishing code in the account settings.
• Use a separate email for exchanges that you never post anywhere.
• Keep only the working amount there: the sum you are ready to lose while a transaction is in progress.

Layer 2. Hardware wallet for the bulk of the money

This is where the savings live: the 80-90% you don’t touch weekly.

• Buy the device only from the manufacturer’s official site. Never from a marketplace, never used, never "sealed, from a friend". A pre-initialized device with a ready-made seed phrase is a classic scam.
• Generate the seed phrase on the device itself and never anywhere else.
• Never type the seed into a phone, a photo, a password manager, a cloud, or a chat. Any screen that asks for the 24 words is an attack, without exceptions.
• Back it up on metal, not paper. Two copies, two physical locations. Paper does not survive water or fire.
• Consider a passphrase (the "25th word"). It creates a separate hidden wallet, so even someone holding your seed phrase gets nothing. But if you forget it, the money is gone, there is no recovery.
• Keep the device unremarkable and unmentioned. See Snoop Dogg above.

Layer 3. Self-custodial hot wallet for daily use

For daily use, swapping crypto, claiming airdrops and interacting with dApps, a self-custodial wallet, such as Coin Wallet, is more comfortable than a hardware wallet. That comfort is exactly why it should never hold much.

Read more: How to Exchange USDT, USDC, and DAI Directly in Coin Wallet — No Exchange Needed

• Keep only what you would be relaxed about losing. In practice, a few percent of your total.
• Use a separate wallet (better: a separate browser profile or a separate cheap phone) for airdrops, testnets and unknown sites. Treat it as disposable.
• Install and update only from the official domain you have bookmarked. Cuban lost $870,000 to this exact step.
• Revoke old token approvals regularly through a tool like revoke.cash or the block explorer. An approval you gave a year ago is still a live permission to move your funds.
• Do a small test transaction before a big transfer, always, even to your own address.
• Never copy an address from your transaction history. Address poisoning attacks put a lookalike address there on purpose. Copy from the source or from your own saved contacts, and check the first and last characters on the hardware device screen.

Extra practices that actually move the needle

USDT and USDC fail for different reasons: different reserves, different banks, different freeze policy. Holding both means one bad headline doesn’t touch 100% of your money. This is the one risk that cold storage cannot fix. That's why you should split the issuers, not just the wallets.

Stablecoins also have no deposit insurance and no bank to call. A normal bank account is part of a diversified setup, not a betrayal of the idea. So, keep some money outside crypto entirely.

And finally, write down a recovery plan for people you trust. Sealed instructions with a lawyer, or a multisig with guardians, following Vitalik’s logic. Most crypto is lost to death and forgetfulness, not to hackers.
Rehearse the recovery once. Restore your seed phrase on a spare device with a tiny amount before you need to do it under stress. A backup you have never tested is not a backup.