Blockchain and Crypto, Member Exclusive, WTF

WTF is stablecoin?

  • Stablecoin is a kind of cryptocurrency that’s tied to a reserve asset that helps stabilize its market value.
  • Here’s everything you need to know about stablecoin.

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WTF is stablecoin?

As of March, stablecoins have reached nearly $40 billion in supply. Earlier this year in January 2021, monthly transaction volume exceeded $200 billion.

Cryptocurrencies have taken up a lot of news coverage over the past seven or eight months, but a lot of the focus has been on Bitcoin. The real story might actually be in stablecoins, which because of their inherent stability, have real potential to seep into everyday financial services. 

Stablecoins offer a lot of the same benefits as traditional crypto — transparency, security, stability, fast transactions, low fees, and privacy — but it also offers stability, something that cryptos like Bitcoin can’t claim. 

WTF is stablecoin?

Stablecoin is a kind of cryptocurrency that gets its value from an external asset. Companies that issue stablecoins will set up a secure ‘reserve’ of the asset backing the stablecoin, typically in a one-to-one ratio. The reserve can be centralized with a central issuer or financial institution, as is the case with fiat or commodity-based assets, or it can be decentralized.

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