Glossary > Stablecoin

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.

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

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