$USDC What is a stablecoin?

First of all, a brief crisis of stablecoins and how they work. The European Central Bank defines stablecoins as "digital units of value that differ from existing forms of currency and are based on a set of stabilization instruments to minimize their price fluctuations against a currency or a basket of them."

Stablecoins are a digital representation of fiat currencies on blockchain networks, developed to mimic fiat prices using a stabilization mechanism. This type of cryptocurrency has a stable price, so users can always redeem a single coin for $1 (or for any other currency in which they are pegged). Additionally, cryptocurrencies can be a tool through which merchants can switch to a more stable digital asset when cryptocurrency markets are volatile.