#StablecoinLaw Stablecoins are a type of cryptocurrency whose goal is to have a stable or semi-stable value, often linked to a traditional currency like the US dollar 🇺🇸.
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✅ Simple Definition:
> Stablecoin = A digital currency linked to a stable asset (like the dollar or gold) to maintain its value and avoid large fluctuations.
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🔹 Types of Stablecoins:
1. Fiat-backed:
Like: USDT (Tether), USDC, BUSD
Each digital currency is backed by real dollars (or equivalent) held in the bank.
2. Crypto-backed:
Like: DAI
Backed by crypto assets like ETH, but has a smart system that monitors and balances its value.
3. Algorithmic Stablecoins:
Like: UST (which collapsed 😓)
Depends on algorithms to adjust supply and demand, but it's risky and prone to collapse.
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💡 Uses of Stablecoins:
Fast money transfers without intermediaries.
Avoid market fluctuations (for example, selling BTC and keeping the value in USDT).
Using it as a "safe harbor" during trading.
In decentralized finance (DeFi) and lending.
$USDT