What Is Stablecoin? Meaning & Example
Definition
A stablecoin is a cryptocurrency designed to hold a steady value, usually pegged to a currency like the US dollar. Its stability depends on how it is backed and managed, and pegs can break.
Related terms
DeFi refers to financial services such as lending, borrowing and trading built on blockchains using smart contracts. It aims to work without traditional intermediaries but carries technical and platform risks.
CryptocurrencyA cryptocurrency is a digital asset that uses cryptography and a blockchain to record ownership and transfers. Most are not issued by governments and can be very volatile.
Exchange RateAn exchange rate is the price of one currency in terms of another. Rates change constantly based on trade, interest rates, inflation and sentiment.
What is Stablecoin?
A stablecoin is a cryptocurrency designed to hold a steady value, usually pegged to a currency like the US dollar. Its stability depends on how it is backed and managed, and pegs can break.
Can you give an example of Stablecoin?
A dollar stablecoin aims to always be worth about $1, backed by reserves or other mechanisms.