Stablecoins are a type of cryptocurrency designed to maintain a consistent value by being pegged to a stable asset such as the US dollar, gold, or other commodities. Unlike traditional cryptocurrencies like Bitcoin, which experience significant price fluctuations, stablecoins provide stability, making them useful for transactions, savings, and cross-border payments.
They can be backed by fiat currency reserves, commodities, or algorithmic mechanisms that regulate supply and demand. Popular stablecoins include USDT (Tether), USDC (USD Coin), and DAI, commonly used in DeFi (decentralized finance) and digital payments.
