A stablecoin is a type of cryptocurrency designed to maintain a stable value.
Unlike other cryptocurrencies that can be highly volatile, stablecoins are typically linked to the value of an external asset, such as a traditional currency.
For example, some stablecoins are pegged to the US dollar (USD), meaning their value is intended to stay close to 1 USD.
Stablecoins are commonly used to:
• Reduce volatility in the crypto market
• Facilitate digital value transfers
• Act as a bridge between cryptocurrencies and traditional currencies