Stablecoins are a type of cryptocurrency designed to maintain a stable value over time, usually pegged to a fiat currency like the US dollar, euro, or a basket of currencies. They combine the instant processing and security of cryptocurrencies with the stable valuations of fiat currencies.


Stablecoins serve various purposes, including as a medium of exchange, a store of value, and a unit of account, without the volatility typically associated with cryptocurrencies like Bitcoin. They are used in digital transactions, crypto exchanges, and decentralized finance (DeFi) applications. There are different types of stablecoins, backed by fiat currencies, commodities, or even algorithms. Tether (USDT), USD Coin (USDC), and Binance USD (BUSD) are among the most widely used stablecoins. Their stability and ease of use make them an integral part of the cryptocurrency ecosystem, facilitating trading, lending, and other financial transactions in the digital asset space.