--- title: "Minting and burning stablecoins" description: "Learn how minting and burning stablecoins work, how issuance differs from redemption, and which records payment teams should reconcile for each supply change." path: "/learn/mint-and-burn/" label: "Payments" image: "/cards/learn-mint-and-burn.webp" --- _Minting creates new stablecoin tokens and increases supply; burning destroys tokens and reduces supply. This guide explains how both operations fit into issuance and redemption, what each onchain record proves, and what payment teams should reconcile. [See how banks issue and manage tokenized deposits on Tempo](/solutions/tokenized-deposits/)._ A business wires $2,000,000 to a stablecoin issuer on a Tuesday morning. Later that day, 2,000,000 new tokens appear in its wallet. That mint is the visible onchain step, but it sits between a bank wire, a compliance review and a reserve deposit that the blockchain does not record. Finance and operations teams that hold or issue stablecoins need to know which part of that flow each record covers. A mint or burn proves a supply change on one network. It does not prove that money arrived in, or left, a bank account. ## What is minting and burning stablecoins? Minting and burning are the onchain operations that increase and decrease a token's supply: minting creates new tokens in a specified address, and burning removes tokens from circulation permanently. For a fiat-backed stablecoin, the issuer usually mints when an approved customer deposits fiat for issuance and burns when that customer returns tokens for redemption. Supply on the network should then track the tokens the issuer has outstanding there. For background on how fiat-backed tokens hold their value, see [what stablecoins are and how they work](/learn/what-are-stablecoins/). ### Issuance and redemption vs. minting and burning Issuance and redemption are business processes between an issuer and its customer. They include account approval, funding, fees and the issuer's legal obligation to pay out. Minting and burning are the technical steps that record those processes on a blockchain. An issuer can complete an issuance by sending tokens it already holds, without minting new supply. ## How stablecoin issuance works Issuance starts in the banking system and ends onchain. Each issuer sets its own eligibility rules, minimums and supported networks, but most direct issuance follows the same order: 1. **Onboarding.** The customer opens an account with the issuer and passes its identity and compliance checks. 2. **Funding.** The customer sends fiat to the issuer's designated bank account, often by wire. 3. **Confirmation.** The issuer matches the incoming wire to the customer's request and confirms the funds are received. 4. **Mint and delivery.** The issuer mints tokens, or transfers existing ones, to the customer's verified address on the requested network. In an illustrative example, a payments company sends a $2,000,000 wire before its bank's cutoff on Tuesday. The issuer matches the wire against the request, then mints 2,000,000 tokens to the company's wallet. The onchain mint takes one transaction. Most of the elapsed time sits in the wire and the issuer's review. A wire sent after Friday's cutoff may not reach the issuer until Monday, because bank payments follow business days. ## How stablecoin redemption works Redemption reverses the flow. The customer sends tokens to the issuer, the issuer burns them, and the issuer pays out fiat to the customer's bank account. The issuer may burn before or after the payout, depending on its process. Continuing the example, the company later redeems 500,000 tokens. It sends them to the issuer's redemption address on Thursday afternoon. The tokens arrive within the network's confirmation time, and the issuer burns them. The $500,000 payout then goes out by wire, subject to the issuer's processing schedule and the receiving bank's hours. If the request lands after the cutoff, the dollars may arrive the next business day. Redemption terms also carry limits. Issuers can set minimum redemption amounts, fees and eligible jurisdictions, and holders without a direct account usually cannot redeem with the issuer at all. ## Records to reconcile for each event Each step in issuance and redemption produces a different record, and each one proves something narrow. The table shows what each event establishes and what needs separate evidence. | Event | What it establishes | What needs separate evidence | | --------------------- | ---------------------------------------------- | -------------------------------------------------- | | Fiat wire received | The issuer's bank credited the funds | That the wire matches an approved issuance request | | Token minted | Supply increased on that network | Reserve funding and authorization of the request | | Token transferred | Tokens moved between two addresses | Whether it was a purchase, payment or redemption | | Token burned | Supply decreased on that network | Whether and when the fiat payout was sent | | Bank payout confirmed | The bank or provider reports the fiat leg done | Which burn and customer record the payout matches | A reconciliation process links these records with shared references: the funding reference, request ID, token contract, amount, transaction hash and payout confirmation. See [payment reconciliation](/learn/payment-reconciliation/) for how teams match onchain and bank records. ## Buying or selling a stablecoin vs. minting or redeeming it Most businesses never mint or burn. They buy tokens from an exchange, a liquidity provider or another holder, which moves existing supply from one address to another. Total supply does not change. Selling tokens for local currency through an off-ramp is also different from redeeming with the issuer. The off-ramp provider sets the rate, fees, limits and payout timing, and its local banking partners decide when the fiat arrives. Read [stablecoin on- and off-ramps](/learn/stablecoin-on-off-ramps/) for how those providers work. The distinction affects cost and risk. A direct redemption depends on the issuer's terms. A sale depends on the counterparty's liquidity, its supported assets and networks, and local rules such as capital controls. ## Native and bridged tokens Cross-chain systems also use minting and burning. Some burn tokens on the source network and mint them on the destination. Others lock tokens in a contract and mint a representation elsewhere. Neither pattern is fiat issuance or redemption. A bridged representation is a separate token with its own contract, controls and redemption path. Two tokens with the same ticker or the same dollar reference value are not operationally interchangeable. Before accepting or sending a token, verify the exact contract address on both networks and confirm that your provider supports that specific asset. ## Operational controls for issuers Teams that mint and burn their own tokens need controls around who can trigger each operation. A practical design separates approval of an issuance or redemption request from its execution, so no single person can both authorize and mint. Common controls include the following: - **Separate roles.** Assign minting, burning and administrative permissions to different keys or teams. - **Supply limits.** Set a cap on total supply so an error or compromised key cannot mint without bound. - **Exception handling.** Route rejected or delayed requests to a review queue instead of resubmitting them, which can create duplicate mints. - **Audit records.** Keep the funding reference, approval, amount and transaction receipt for every supply change. A technical permission to mint does not provide regulatory authorization or reserve backing. Those come from the issuer's licenses, reserve arrangements and legal terms. ## Where Tempo fits Tempo supports issuer-controlled minting and burning through TIP-20, its native token standard for stablecoins. - **Mint and burn operations.** The [minting guide](https://docs.tempo.xyz/docs/guide/issuance/mint-stablecoins) documents the issuer role, supply cap and transfer-policy constraints, with testnet examples. - **Role-based access control.** Minting, freezing and burning blocked balances are [separate TIP-20 roles](https://docs.tempo.xyz/docs/protocol/tip20/overview#role-based-access-control-rbac), each assignable to different teams or addresses. - **Transfer policies.** The [TIP-403 Policy Registry](https://docs.tempo.xyz/docs/protocol/tip403/overview) lets issuers enforce allowlists or blocklists that tokens check on every transfer. - **Transfer memos.** [Transfer memos](/learn/transfer-memos/) attach payment references to transfers so onchain records match funding and payout records. Reserves, regulatory authorization, redemption terms and the fiat banking leg remain the issuer's responsibility. ## Frequently asked questions ### Does minting prove a stablecoin has reserves? No. A mint records an increase in token supply on one network. Reserve assets, custody arrangements and redemption obligations need separate evidence from the issuer, such as its disclosures and attestations. ### Does a burn mean the customer received dollars? No. A burn confirms that tokens were destroyed. The fiat payout must be confirmed by the bank or provider and reconciled to the burn separately. ### Can every stablecoin holder redeem directly with the issuer? No. Direct redemption usually requires an approved account with the issuer and depends on the issuer's terms, the holder's jurisdiction, the asset and the network. Most holders sell through an exchange or off-ramp instead. ### Is buying a stablecoin the same as minting it? No. Buying from an exchange or another holder usually transfers existing tokens, so total supply does not change. Minting happens only when the issuer creates new tokens against an approved issuance request. ### Why does a bridged token have a different contract address? A bridge often locks or burns tokens on one network and mints a representation on another. The representation is a separate contract with its own issuer, terms and redemption path, so it should not be treated as the native asset. ### How long does stablecoin redemption take? The burn settles when the network confirms the transaction. The fiat payout follows the issuer's processing schedule and the receiving bank's hours and cutoffs, so it can take one or more business days.