What Is A Stablecoin?

What is a Stablecoin?

According to Trustwallet, (2021), Stablecoins are a type of cryptocurrency. Unlike other cryptocurrencies, however, its value is fixed.

That is because it is fixed to the price of another stable asset. Examples of these assets include:

USD Coin (USDC).

Gold.

Oil.

Stablecoins are backed on a 1:1 ratio by money held in bank accounts. In order to issue Stablecoins, investors need to deposit the equivalent amount of FIAT currency such as USD into bank accounts.

This is the reason why Stablecoins are stable and not volatile.

What can you do with the Stablecoin?

Make purchases.

Buy and sell other cryptocurrencies.

Convert Your Stable Coins To USD or Other Currencies

Deposit cash without the traditional banking system, just like other cryptocurrencies.

Deposit cash without the traditional banking system, just like other cryptocurrencies.


Examples of Stablecoins

Stablecoin examples include:

  • Dai (DAI)
  • Paxos (PAX)
  • TRUE USD
  • Tether (USDT)
  • Gemini (GUSD)
  • StableUSD (USDS)
  • USD Coin (USDC)
  • GBP Stable Coin
  • Stasis Stasis (EURS)
  • Binance USD (BUSD) (Binance, 2021).

What is the value of one Stablecoin?

One Stable Coin = USD $1.00.

Stablecoins explained in 2 minutes

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