Types with Guide
By Staff Reporters
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According to Investopedia, a stablecoin is a class of cryptocurrencies that attempt to offer price stability and are backed by a reserve asset. Stablecoins have gained traction as they attempt to offer the best of both worlds—the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies.
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Stablecoins are cryptocurrencies where the price is designed to be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals).
CITE: https://www.r2library.com/Resource/Title/082610254
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Key Points
- Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference.
- Stablecoins may be pegged to a currency like the U.S. dollar or to a commodity’s price such as gold.
- Stablecoins achieve their price stability via collateralization (backing) or through algorithmic mechanisms of buying and selling the reference asset or its derivatives.
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Filed under: Alternative Investments, Funding Basics, Glossary Terms, Health Economics, Investing | Tagged: crypto, fiat currency, stablecoin, Stablecoins, What Really is a STABLECOIN? |
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