What is a stablecoin

Mar 15, 2022
A stablecoin is a digital currency tied to a stable reserve asset, for example, USD or gold. Storing funds in stable coins significantly reduces the risk due to the volatility of cryptocurrency or token rates.
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The stablecoin is a link between cryptocurrencies and tokens with fiat currencies and raw materials due to the fixation of the value to reserve assets. The use of stablecoins is equally good, both for storing funds and for making transfers between user accounts or accounts.

The idea of merging the stability of traditional financial assets with the flexibility of digital assets and cryptocurrencies quickly gained popularity in the community of crypto enthusiasts and investors. The most popular stablecoin in the world is USDT issued by Tether and operating in the Ethereum (ERC) and Tron (TRC) networks.

The key advantages of stablecoins are their openness, global popularity of use, fast access, speed and security of transmission. The cost of stablecoin transactions is a dynamic value and depends on the network, as well as the demand for the transaction at the current moment. In the case of an increased volume of transactions, the network is overloaded, which leads to an increase in the cost of a single transaction. Stablecoins can be stored on crypto exchanges, software and hardware wallets.