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Definition of"stablecoin" in English

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stablecoin

/ˈsteɪb(ə)lˌkɔɪn/
Noun

Definitions

1

Noun

A type of cryptocurrency designed to maintain a stable value relative to a specified asset, such as a fiat currency (e.g., the US dollar), a commodity (e.g., gold), or another cryptocurrency. This stability is typically achieved through mechanisms like collateralization (holding reserves of the pegged asset) or algorithmic control, aiming to minimize price volatility.
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Examples

  • "Many cryptocurrency traders use stablecoins like USDT or USDC to move funds between different digital assets without converting back to traditional fiat currency."

    Many cryptocurrency traders use stablecoins like USDT or USDC to move funds between different digital assets without converting back to traditional fiat currency.

  • "The central bank is actively researching the regulatory implications and potential impact of stablecoins on the broader financial system."

    The central bank is actively researching the regulatory implications and potential impact of stablecoins on the broader financial system.

Etymology

A compound word formed from 'stable' (referring to its fundamental characteristic of price stability) and 'coin' (denoting its nature as a digital currency or token). The term originated in the cryptocurrency space as a solution to the extreme volatility of early digital assets.

Cultural Notes

Stablecoins serve as a critical bridge between the volatile world of cryptocurrencies and the stability of traditional finance. They are widely adopted for various purposes within the crypto ecosystem, including facilitating trading, enabling decentralized finance (DeFi) applications, providing a safe haven during market downturns, and offering a means for faster and cheaper cross-border payments compared to conventional banking. Their regulation, transparency, and potential systemic risks are subjects of ongoing global discussion among governments and financial institutions.

Common Phrases

fiat-backed stablecoin
algorithmic stablecoin
collateralized stablecoin
stablecoin issuer
stablecoin reserve

Word Forms

Noun Forms

Singularstablecoin
Pluralstablecoins
Frequency:Common

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