#USStablecoinBill A stablecoin is a cryptoasset pegged to another asset, such as fiat currencies or precious metals. 

Stablecoins are designed to maintain a relatively stable price so that users can avoid the volatility risks common in the crypto markets.

There are three types of stablecoins: fiat-backed, crypto-backed, and algorithmic.

Due to their practical use and large market capitalization, regulators are beginning to take a closer look at stablecoins.

Introduction

Cryptocurrencies aren’t all about volatility. In fact, stablecoins are specifically designed to maintain a fixed price. In an industry where coins and tokens can crash overnight, there is a massive demand for currencies that mix blockchain benefits with the ability to track a more stable asset. If you haven’t started using stablecoins while trading or investing, it’s worth learning more about them as well as the benefits and drawbacks they bring.



What Is a Stablecoin in Cryptocurrency?

Stablecoins are digital assets that track the value of fiat currencies or other assets. For example, you can purchase tokens pegged to the dollar, euro, yen, and even gold and oil. A stablecoin allows the holder to lock in profits and losses and transfer value at a stable price on peer-to-peer blockchain networks.

Bitcoin (BTC), Ether (ETH), and other altcoins have historically been volatile. While this provides many opportunities for speculation, it does have drawbacks. Volatility makes it challenging to use cryptocurrencies for day-to-day payments. For example, merchants may take $5 in BTC for a coffee one day but find that their BTC is worth 50% less the next. This makes it challenging to plan and operate a business that accepts crypto payments.

Before, crypto investors and traders had no way to lock in a profit or avoid volatility without converting crypto back into fiat. The creation of stablecoins provided a simple solution to these issues. Today, you can easily get in and out of crypto volatility using stablecoins like TrueUSD (TUSD)