What Are Stablecoins? Review

Stablecoins are a class of cryptocurrency designed to maintain a consistent market value by "pegging" their price to a stable external reference, most commonly a fiat currency like the U.S. dollar. While traditional cryptocurrencies like Bitcoin are known for extreme price volatility, stablecoins aim to combine the instant processing and borderless security of blockchain technology with the reliable value of traditional money. Core Mechanisms of Stability

The primary way stablecoins maintain their value is through , where every digital token is backed by a reserve of assets held by an issuer. There are four main categories based on how they achieve this stability: Stablecoins: Definition, How They Work, and Types What Are Stablecoins?