Stablecoin
A crypto asset pegged to a stable reference like the US dollar.
Detailed Description
Stablecoin
What are stablecoins?
Stablecoins are cryptocurrencies designed to maintain a stable value relative to a specific asset or a basket of assets.
What are the main types of stablecoins?
The three main types are fiat-collateralized, crypto-collateralized, and algorithmic stablecoins.
How do fiat-collateralized stablecoins maintain their value?
They are backed by reserves of fiat currency held in a bank account, ensuring each stablecoin issued has an equivalent amount in reserve.
What are some advantages of using stablecoins?
Advantages include price stability, faster transactions, lower fees, accessibility, and programmability.
What regulatory challenges do stablecoins face?
Stablecoins may face regulatory scrutiny regarding consumer protection, AML/KYC compliance, financial stability, and taxation.