stable coins

Extracted Attributes

• Types

  Fiat-collateralized, crypto-collateralized, non-collateralized

• Category

  Cryptocurrency

• Mechanism

  Pegged to a reference asset (fiat currency, exchange-traded commodities, or other cryptocurrencies)

• Advantages

  Provide stability, enable fast and cheap transactions, can be used as a medium of exchange, unit of account, and store of value, facilitate cross-border transactions

• Challenges

  Issuers failing to maintain adequate reserves, leading to investor losses; not all stablecoins are created equal and some carry greater risks

• Key Benefit

  Reduce price volatility common in other digital assets

• Primary Function

  Maintain stable value

• Market Capitalization

  Over $190 billion

Timeline

• Stablecoins were mentioned in a podcast episode discussing Trump Administration policies and America's future, alongside AI and in contrast to business flight from California, as part of new technologies relevant to securing the nation's future. (Source: Document 68bb6bb7-c6bf-412f-a606-9d5f4d04d37e)

  Undated

Stablecoin

A stablecoin is a type of cryptocurrency where the value of the digital asset is supposed to be pegged to a reference asset, which is either fiat money, exchange-traded commodities (such as precious metals or industrial metals), or another cryptocurrency. In theory, 1:1 backing by a reference asset could make a stablecoin value track the value of the peg and not be subject to the radical changes in value common in the market for many digital assets. In practice, stablecoin issuers have yet to be proven to maintain adequate reserves to support a stable value, and there have been a number of failures with investors losing the entirety of the (fiat currency) value of their holdings.

Web Search Results

• The Ultimate List (22 Stablecoins to Know) | MoonPay

  ## What are stablecoins? Stablecoins are a type of cryptocurrency that attempt to maintain a steady value by being pegged to an external asset, such as the US dollar, euros, or gold. They're intended to offer a safe harbor in the often-volatile crypto market, designed to combine the stability of traditional currencies with the advantages of cryptocurrencies. [...] With a total market capitalization of over $190 billion, stablecoins have quickly become a go-to tool in the digital currency world. These digital assets are designed to hold steady, giving you the stability of traditional money with the speed and convenience of cryptocurrency.

• Stablecoin - Wikipedia

  A stablecoin is a type of cryptocurrency where the value of the digital asset is supposed to be pegged to a reference asset, which is either fiat money, exchange-traded commodities (such as precious metals or industrial metals), or another cryptocurrency. In theory, 1:1 backing by a reference asset could make a stablecoin value track the value of the peg and not be subject to the radical changes in value common in the market for many digital assets. In practice, stablecoin issuers have yet to [...] Reserve-backed stablecoins are digital assets that are stabilized by other assets. Furthermore, such coins, assuming they are managed in good faith and have a mechanism for redeeming the asset(s) backing them, are unlikely to drop below the value of the underlying physical asset, due to arbitrage. However, in practice, few, if any, stablecoins meet these assumptions.[citation needed] [...] The value of stablecoins of this type is based on the value of the backing currency, which is held by a third party–regulated financial entity. Fiat-backed stablecoins can be traded on exchanges and are redeemable from the issuer. The stability of the stablecoin is equivalent to the cost of maintaining the backing reserve and the cost of legal compliance, licenses, auditors, and the business infrastructure required by the regulator.

• What is a stablecoin? | Hedera

  A stablecoin is a digital asset that remains stable in value against a pegged external traditional asset class. Stablecoin reduces price volatility by backing its value against a conventional asset. The backing asset could be a combination of currencies, a single fiat currency, or other valuable assets. Stablecoins aim to create a stable and reliable environment to increase cryptocurrency adoption and negate digital assets' speculative nature. They offer the best of both worlds — security and [...] Navigation QUICKSTART What is a stablecoin? ===================== Stablecoins are an attempt to create a cryptocurrency token with a stable price—their stability commonly achieved by pegging the token to an asset such as gold or fiat. By being backed by more traditional investments, the market has greater confidence in their price. Tokens Learning center after reading this, you'll understand: • What a stablecoin is and why we need them • The history of stablecoins in the defi space [...] Stablecoins are an attempt to create a cryptocurrency token with a stable price. This stability is commonly achieved by pegging the token to an asset such as gold or fiat currency.

• Top Stablecoin Tokens by Market Capitalization - CoinMarketCap

  Stablecoins are a type of cryptocurrency that are designed to minimize the volatility often associated with cryptocurrencies. They achieve this stability by being pegged to a reserve of assets. These assets can be a variety of things, such as a specific amount of a fiat currency like the dollar or euro, or other types of assets like gold or other cryptocurrencies. The value of a stablecoin is directly linked to the value of these underlying assets. If the value of the assets changes, so does [...] There are primarily three types of stablecoins: fiat-collateralized, crypto-collateralized, and non-collateralized. Fiat-collateralized stablecoins are backed by fiat currencies like the dollar or euro. Each stablecoin is equivalent to a specific amount of the fiat currency, which is held in reserve. Crypto-collateralized stablecoins are backed by other cryptocurrencies. Due to the volatility of cryptocurrencies, these stablecoins are often over-collateralized to absorb large price swings. [...] Stablecoins offer several advantages. Firstly, they provide stability in the highly volatile cryptocurrency market. This makes them a safe haven for investors during turbulent market conditions. Secondly, they enable the benefits of cryptocurrencies, such as fast and cheap transactions, while mitigating the risk of price fluctuations. Thirdly, they can be used as a medium of exchange, unit of account, and store of value, just like traditional money. Lastly, they can also facilitate cross-border

• The World's 6 Largest Stablecoins By Market Cap - Bankrate

  How stablecoins work -------------------- Stablecoins are a special type of cryptocurrency designed to maintain a fixed value over time. Unlike volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins are pegged to a traditional currency, most commonly the U.S. dollar. [...] Image 50: A stack of golden coins representing crypto tokens. Just_Super/Getty Images Stablecoins have become an essential part of the cryptocurrency ecosystem. Designed to maintain a fixed value, these tokens provide a reliable way for traders to manage risk, reduce transaction fees and even earn passive income. However, not all stablecoins are created equal, and some carry greater risks than others.