What are stablecoins?
Stablecoins are a type of cryptocurrency designed to keep their value stable over time, unlike Bitcoin or Ethereum, which can swing wildly in price. The idea behind a stablecoin is simple: it’s a digital token you can use just like other cryptocurrencies, but each token is “pegged” to something stable — usually the U.S. dollar, a basket of currencies, or even gold. For example, a popular stablecoin like USDC is always worth about $1, because it’s backed by real dollars held in reserve.
In other words, stablecoins combine the best of both worlds: the speed and flexibility of cryptocurrency with the predictable value of traditional money. This makes them useful for sending money quickly and cheaply around the world, protecting savings from inflation in some countries, or trading other cryptocurrencies without worrying about price swings.