$USDC

**Stablecoin (110 words)**

A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to a reserve asset, such as fiat currency (e.g., USD, EUR), commodities (e.g., gold), or other cryptocurrencies. Unlike volatile cryptocurrencies like Bitcoin, stablecoins aim to provide price stability, making them suitable for everyday transactions, remittances, and decentralized finance (DeFi) applications.

There are three main types:

1. **Fiat-collateralized** (e.g., USDT, USDC) – Backed 1:1 by fiat reserves.

2. **Crypto-collateralized** (e.g., DAI) – Overcollateralized with other cryptocurrencies.

3. **Algorithmic** (e.g., former UST) – Uses smart contracts to control supply.

Stablecoins combine the benefits of blockchain (fast, borderless transactions) with reduced volatility, bridging traditional finance and crypto ecosystems. Regulatory scrutiny remains high to ensure transparency and stability.