What is Stablecoin?
A type of cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US dollar.
A stablecoin is a cryptocurrency whose value is pegged, or tied, to a reserve asset like the US dollar, another cryptocurrency, or a commodity such as gold. This is intended to offer the instant processing and security of cryptocurrency transactions while minimizing the volatility common to assets like Bitcoin. Major examples include Tether (USDT) and USD Coin (USDC), which are pegged 1:1 to the US dollar.
They are widely used as a medium of exchange within the crypto ecosystem, for transferring value between exchanges quickly, and as a safe haven during periods of high market volatility. Their stability relies on the credibility of the issuer's reserves and the mechanism used to maintain the peg.