Stablecoin
A cryptocurrency designed to maintain a stable value, most often pegged 1:1 to the US dollar.
A stablecoin is a cryptocurrency whose value is pegged to another, stable asset — most often the US dollar (e.g., USDT, USDC) at a 1:1 ratio, though stablecoins pegged to other currencies, a basket of assets, or gold also exist. Price stability is achieved through reserves of collateral assets backing the issuance or through algorithmic mechanisms.
Stablecoins primarily serve as a "safe haven" during market volatility (allowing users to exit a position without converting to traditional currency) and as a settlement currency on exchanges and in DeFi. Regulatory treatment varies by country — the EU's MiCA framework, for instance, splits regulated stablecoins into two categories (e-money tokens and asset-referenced tokens), while other jurisdictions take different approaches.
Related terms
Global Stablecoin (GSC)
A term used by international financial regulators for a stablecoin with a user base and transaction volume large enough to pose systemic risk.
DeFi (Decentralized Finance)
An ecosystem of financial applications running on blockchain via smart contracts, without banks or other central intermediaries.
Proof of Reserves
A cryptographic or audit-based demonstration that an exchange actually holds the customer funds it claims to, published to build trust after high-profile collapses.