What is a stablecoin?
A crypto token designed to hold a steady value, usually one US dollar, so it can be used for payment and trading without price swings.
Most large stablecoins are backed by reserves of cash and short-term government debt held by an issuer who promises redemption at par. Others are backed by crypto collateral held in smart contracts and over-collateralised to absorb volatility.
Why it matters: stablecoins are what most people actually transact in, and they are the main bridge between crypto and the banking system. The risk is not price volatility but the backing: a peg holds only as long as the reserves are real, liquid and redeemable, or the collateral mechanism survives stress. Algorithmic designs without real backing have failed catastrophically.
Related terms
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- VolatilityHow much and how quickly an asset's price moves, in either direction.
Crypto assets are volatile and high-risk. Prices shown are indicative and may be delayed. Always do your own research. Coinpric does not provide financial advice.