meaning of stablecoin

A type of cryptocurrency designed to maintain a stable value relative to a specific asset or a basket of assets, such as a fiat currency (e.g., USD), a commodity (e.g., gold), or another cryptocurrency, in order to mitigate the high price volatility typically associated with traditional cryptocurrencies.

Many traders use stablecoins to move funds between exchanges without converting to fiat currency, thus avoiding market volatility.

Tether (USDT) is a well-known example of a fiat-collateralized stablecoin.

The regulation of stablecoins is a growing concern for financial authorities worldwide.

Etymology: Coined from 'stable', referring to its price stability, and 'coin', a common term for a unit of cryptocurrency.

Cultural Notes: Stablecoins play a crucial role in the cryptocurrency ecosystem by providing a bridge between the volatile digital asset market and the more stable traditional financial system. They facilitate trading, lending, and payments within the crypto space and are increasingly subject to regulatory scrutiny due to their potential impact on financial stability.

Word Frequency: common

Category: crypto

Language: English

Pronunciation: ˈsteɪbəlˌkɔɪn