Stablecoins
Stablecoins are cryptocurrencies whose price is pegged to another asset such as the U.S. Dollar. They’re “stable” because this 1:1 peg is not meant to fluctuate, making them a desirable alternative to more volatile cryptocurrencies.
By Geoffrey Lyons
Published on Aug 2, 2024
Last modified on Aug 22, 2024
Stablecoins are cryptocurrencies whose price is pegged to another asset such as the U.S. Dollar. They’re “stable” because this 1:1 peg is not meant to fluctuate, making them a desirable alternative to more volatile cryptocurrencies.
As we learn in Econ 101, price stability is necessary for a currency to be a medium of exchange. This is partly why stablecoins often top other cryptocurrencies in trading volume.
Further reading: How do stablecoins work? A guide to stablecoin cryptocurrencies