#BigTechStablecoin

What is a stablecoin?

Stablecoins are a type of cryptocurrency that, unlike others like Bitcoin or Ethereum, maintain a more or less stable value. That is, they are assets with little volatility and can indeed serve as a medium of exchange.

➡️ To achieve this, they tie their value to another asset such as the euro, the dollar, or even gold.

If a stablecoin is linked to the dollar, its value will always be very close to $1, which offers stability against the fluctuations that are common in other cryptocurrencies.

How do stablecoins work?

These cryptos are designed to maintain their stable value, but how do they achieve this exactly? The key, as we have seen, lies in how they are backed and in the mechanisms they use to avoid sharp price movements.