Stablecoin
Also known as: Price-Stable Crypto, USD-Pegged Token, Crypto Dollar
A type of cryptocurrency pegged to a stable asset like the US dollar to reduce price volatility.
A stablecoin is a digital asset that maintains a stable value by being pegged to a reserve asset such as fiat currency (e.g., USD), commodities, or algorithmic mechanisms. Types of stablecoins include fiat-backed (USDC, USDT), crypto-collateralized (DAI), and algorithmic (FRAX). They are essential to DeFi and everyday crypto use, offering price stability, low volatility, and efficient transactions. Stablecoins enable lending, remittances, and on-chain payments while minimizing exposure to crypto market swings. Regulatory discussions around their backing and transparency are ongoing.