#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