Stable Coin
Table of Contents:
Definition of Stable Coin
A stable coin is a type of cryptocurrency designed to maintain a relatively stable value by pegging its price to a reserve of traditional assets or commodities.
Unlike other cryptocurrencies, stable coins aim to minimize price volatility, making them more suitable for everyday transactions and as a store of value.
They provide a bridge between the digital and traditional financial worlds, offering the benefits of blockchain technology while reducing the uncertainty associated with the fluctuating value of many cryptocurrencies.
What is Stable Coin?
A stable coin refers to a cryptocurrency that is engineered to have a steady and predictable value, often tied to a specific external asset or currency.
This stability is achieved by backing the stable coin with reserves of fiat currency, commodities like gold, or other digital assets.
Stable coins serve as a means of mitigating the volatility commonly associated with cryptocurrencies like Bitcoin or Ethereum, making them more practical for daily transactions and enabling users to preserve value in a more reliable manner.
