Glossary > Stablecoin


What is a stablecoin?

Stablecoin is a cryptocurrency whose value is more stable than conventional cryptocurrencies. Stablecoin is usually backed by other currencies or assets such as fiat money, gold, oil, etc. ​The bitcoin system has coins that are classified as stablecoins.

It could be backed with fiat or a traded commodity (such as metals for example) because stablecoins price is steadier unlike other cryptocurrencies such as Bitcoin.

How does stablecoin work?

For example, The USDC currency is backed by the US dollar. Therefore, the value of USDC depends on the volatility and distribution of that currency. This depends on many factors such as politics, economy, supply-demand and many others.

The first stablecoin by market capitalization is Tether (USDT). Other well-known stablecoins are USD Coin (USDC), Binance USD (BUSD) and etc.

A stablecoin is a kind of cryptocurrency token that is backed one on one by another asset.

Update all you need to know about cryptocurrencies and regulations with Scorechain!

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, and Tron with TRC10 and TRC20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.