Centralized Stablecoin Redemption
Learn how to redeem stablecoins back to fiat currency or assets through stablecoin issuers (such as Tether, Circle, Paxos, PayPal, etc.)
Overview
Centralized stablecoin redemption is conducted through regulated institutions, exchanging stablecoins back to fiat currency or assets, with high compliance and reliability. Major issuers include Tether (USDT), Circle (USDC), Paxos (USDP, USDG), PayPal (PYUSD), and others.
Key Features:
- ✅ High Compliance: Regulated, legally compliant
- ✅ High Transparency: Sufficient reserves, 1:1 redemption
- ✅ Price Stability: Direct exchange to fiat, stable price
- ✅ Large Amount Support: Suitable for institutions and large users
- ⚠️ Requires KYC: Must complete identity verification
- ⚠️ High Threshold: Usually minimum amount requirements ($100,000-$1,000,000)
- ⚠️ Complex Process: Requires corporate verification and compliance procedures
Target Users:
- Institutional investors and large users
- Users needing to exchange stablecoins back to fiat
- Users able to complete KYC/AML verification
Tether (USDT)
Redemption Process:
Login to Account
- Visit Tether Official Website
- Login with verified account
Initiate Redemption Request
- Select "Redeem" option
- Select amount of USDT to redeem
- Choose target asset type (USD, EUR, etc. for fiat, or BTC, ETH, etc. for assets)
- Choose target blockchain network (if applicable)
Confirm Redemption Information
- Confirm redemption amount
- Confirm receiving address or bank account
- Review redemption fees
Submit Redemption Request
- Confirm and submit redemption request
- Wait for review (usually hours to days)
Receive Assets
- After approval, assets will be sent to specified address or bank account
- Fiat currency usually via bank transfer, cryptocurrencies to specified address
Fee Structure:
- Minimum Amount Requirement: $100,000 USD (for purchase or redemption)
- Redemption Fee: $1,000 or 0.1% (whichever is greater)
- Processing Time: Usually hours to days
Notes:
- Must use verified account
- Need to complete KYC/AML verification
- Minimum redemption amount is $100,000 USD
- Redemption fees are high, suitable for large redemptions
- Processing time is long, not suitable for urgent needs
Circle (USDC)
Redemption Process:
Login to Account
- Visit Circle Official Website
- Login with verified Circle Account
Initiate Redemption Request
- Initiate redemption request through Circle platform or API
- Select amount of USDC to redeem
- Choose target asset type (USD, etc.)
- Choose target blockchain network (if applicable)
Confirm Redemption Information
- Confirm redemption amount
- Confirm receiving bank account
- Review redemption fees
Submit Redemption Request
- Confirm and submit redemption request
- Wait for processing
Receive Assets
- After processing, USD will be sent to specified account via bank transfer
Fee Structure:
- Usually has minimum amount requirement (individual users typically $10,000 USD minimum, institutional users may be higher)
- Please consult Circle official for specific fees
Notes:
- Need to complete KYC/AML verification
- Usually has high minimum amount requirements
- Process is relatively complex with longer review times
- Most individual users are better suited to sell USDC through exchanges
Paxos (USDP, PYUSD, USDG)
Supported Stablecoins and Networks:
- USDP: Ethereum network
- PYUSD: Ethereum, Solana, Arbitrum, Stellar
- USDG: Ethereum, Solana, X Layer
Redemption Process:
Add Fiat Account
- Navigate to Fiat Accounts in Paxos Dashboard
- Add bank account information
- Fill in recipient details and mailing address
Redeem Asset
- Go to Dashboard and click Convert
- Select stablecoin to redeem (USDP, PYUSD, or USDG)
- Choose source where asset is located (Profile or External Account/Wallet)
- Select asset to receive (USD)
- Choose destination (bank account)
- Confirm and submit redemption request
Receive Assets
- Monitor redemption progress in Transactions
- After processing, USD will be sent to specified account via bank transfer
Fee Structure:
- ✅ Zero Fees: Institutional users can redeem USDP, PYUSD, and USDG with zero fees
- ✅ Unlimited Liquidity: Enjoy the speed and flexibility of a primary marketplace
- ✅ 1:1 Redemption: Reserves held 100% in US dollar deposits, US treasuries and cash equivalents, always available
- References: Paxos Mint and Redeem | Paxos Redeem Guide
Notes:
- Primarily targets institutional users
- Need to complete strict compliance and KYC procedures
- Usually has high minimum amount requirements
- Individual users are usually better suited to sell through exchanges
PayPal (PYUSD)
Redemption Methods:
Method 1: Through Paxos (Institutional Users)
Institutional users can redeem PYUSD directly through Paxos with zero fees and 1:1 redemption:
- Add fiat account in Paxos Dashboard
- Select Convert, convert PYUSD to USD
- Transfer USD to bank account
Reference: Paxos Redeem Guide
Method 2: Through PayPal Platform (Individual and Business Users)
Individual and business users can sell PYUSD through PayPal platform:
Login to PayPal Account
- Visit PayPal Official Website
- Login with verified account
Initiate Redemption Request
- Select sell PYUSD on PayPal platform
- Enter amount of PYUSD to redeem
- Choose receiving method (PayPal balance or bank account)
Confirm Redemption Information
- Confirm redemption amount
- Confirm receiving account
- Review redemption fees
Submit Redemption Request
- Confirm and submit redemption request
- Wait for processing
Receive Assets
- After processing, USD will appear in your PayPal balance or bank account
Fee Structure:
- Institutional Users (through Paxos): ✅ Zero fees for redemption
- Individual and Business Users (through PayPal):
- ✅ Zero fees: No fees to sell PYUSD on PayPal platform
- ✅ Transfer fees: No transfer fees for PYUSD on Solana network
- ⚠️ Conversion fees: Fees apply when converting between PYUSD and other cryptocurrencies
- Reference: PayPal PYUSD Page
Notes:
- Institutional Users: Need Paxos institutional account, enjoy zero fees and unlimited liquidity
- Individual and Business Users: Need PayPal platform, must complete account verification and KYC/AML verification
- May not be available in certain regions
- Usually has minimum redemption amount requirement
Preparation
1. Confirm Account Status
Information to Confirm:
- Account Verification Status: Ensure KYC/AML verification is completed
- Account Balance: Ensure sufficient stablecoins for redemption
- Minimum Amount Requirement: Confirm minimum redemption amount is met
2. Prepare Receiving Account
Fiat Redemption:
- Prepare bank account information
- Ensure account can receive corresponding currency
- Confirm account information is accurate
Asset Redemption:
- Prepare receiving address (BTC, ETH, etc.)
- Confirm address is correct and can receive corresponding assets
- Confirm target blockchain network
3. Understand Fees
- Understand redemption fee structure
- Calculate total costs
- Confirm redemption is economically reasonable
Risk Management
1. Compliance Risk
Risk Types:
- KYC/AML review failure
- Account freeze
- Regulatory policy changes
Mitigation Strategies:
- Ensure account verification is complete
- Comply with regulatory requirements
- Monitor regulatory developments
2. Time Cost
Risk Types:
- Long processing time
- Unable to meet urgent needs
- Uncertain review time
Mitigation Strategies:
- Plan ahead, reserve sufficient time
- Prepare backup plans
- Consider selling through exchanges
3. Fee Risk
Risk Types:
- High redemption fees
- Accumulated fees for large redemptions
- Exchange rate fluctuations
Mitigation Strategies:
- Understand fee structure
- Calculate total costs
- Consider batch redemption
Best Practices
Plan Ahead
- Reserve sufficient review and processing time
- Understand minimum amount requirements
- Prepare complete account information
Choose Reliable Issuers
- Choose reputable issuers
- Monitor reserve reports and transparency
- Understand issuer's regulatory status
Redeem in Batches
- Large redemptions should be done in batches
- Reduce single transaction risk
- Diversify time costs
FAQ
Q: How long does redemption take?
A: Usually takes hours to days, depending on:
- Issuer's processing speed
- Review time
- Bank transfer time (for fiat redemption)
Q: What is the minimum redemption amount?
A: Varies by issuer:
- Tether (USDT): $100,000 USD
- Circle (USDC): Usually $10,000-$100,000 USD
- Paxos (USDP, USDG): Usually $100,000 USD minimum
Q: What are the redemption fees?
A: Varies by issuer:
- Tether (USDT): $1,000 or 0.1% (whichever is greater)
- Circle (USDC): Please consult Circle official
- Paxos (USDP, USDG): Please consult Paxos official
Q: Can individual users redeem stablecoins through Tether, Circle, or Paxos?
A: Details are as follows:
- Tether (USDT): ✅ Individual verification supported, but threshold is very high (minimum $100,000 USD)
- Circle (USDC): ⚠️ Limited support, usually has high minimum amount requirements
- Paxos (USDP, USDG): ⚠️ Limited support, primarily targets institutional users
Recommendations for Individual Users:
- Sell stablecoins through exchanges (simplest and fastest)
- Use decentralized protocols for redemption (such as MakerDAO, Ethena)
- Obtain fiat through other on-ramp/off-ramp channels
Related Links: