A type of cryptocurrency designed to maintain a stable value by being pegged to an underlying asset, such as a fiat currency (e.g., USD), a commodity (e.g., gold), or a basket of assets. Stablecoins reduce price volatility and are commonly used for payments, trading, and decentralised finance (DeFi) applications. Types: Fiat-Collateralised: Backed by fiat currencies [...]

By Published On: December 5, 2024

A type of cryptocurrency designed to maintain a stable value by being pegged to an underlying asset, such as a fiat currency (e.g., USD), a commodity (e.g., gold), or a basket of assets. Stablecoins reduce price volatility and are commonly used for payments, trading, and decentralised finance (DeFi) applications.

Types:

  • Fiat-Collateralised: Backed by fiat currencies like USD (e.g., USDT, USDC).
  • Crypto-Collateralised: Backed by cryptocurrencies and often over-collateralised (e.g., DAI).
  • Commodity-Collateralised: Pegged to physical assets like gold (e.g., PAXG).
  • Algorithmic: Stabilised by supply and demand adjustments via smart contracts (e.g., TerraUSD).

Use Cases: Payments, remittances, trading, lending, and hedging against volatility.