A digital wallet is software or hardware that manages the cryptographic credentials used to control digital assets and enables users to create, sign, and submit transactions.
Blockchain assets remain recorded on the ledger. The wallet manages private keys, signing permissions, addresses, transaction data, and connections to blockchain networks or applications. Wallets can be custodial, where a service provider controls the signing keys, or self-custodial, where the user controls them. Some wallets also provide exchange, payment, recovery, or identity functions.
A wallet does not physically store stablecoins or other blockchain assets. It manages the credentials and transaction functions used to control assets recorded on the ledger.
Wallet architecture determines who can authorize transfers, who bears key-management risk, and how users access stablecoin payments and decentralized applications.
A mobile self-custodial wallet can generate an address, sign a USDC transfer with the user's private key, and broadcast the transaction to the network.