Crypto is known for volatility — prices can swing wildly in minutes. But not all crypto assets behave this way. Some are built to stay stable. These are called stablecoins.
In this article, you’ll learn what stablecoins are, how they work, and why they play a vital role in the crypto economy.
What is a stablecoin?
A stablecoin is a cryptocurrency that’s designed to maintain a stable value — usually pegged to a fiat currency like the US dollar or euro. 1 stablecoin = 1 unit of the reference currency.
This makes stablecoins useful for payments, trading, saving, and avoiding volatility.
Types of stablecoins
- Fiat-backed: Backed 1:1 by reserves held in traditional currency (e.g. USDC, EURC)
- Crypto-backed: Backed by other cryptocurrencies (e.g. DAI, overcollateralized)
- Algorithmic: Maintains value using supply-and-demand rules (higher risk)
Benefits of stablecoins
- Stability: Reduces exposure to price swings
- Speed: Faster and cheaper than traditional bank transfers
- Accessibility: 24/7 availability without banks or borders
- Programmability: Can be integrated into smart contracts and dApps
Risks and considerations
- Stablecoins depend on the trustworthiness of the issuer or collateral
- Not all are fully backed or transparent
- Some regulators are pushing for tighter controls and disclosure rules
Examples of stablecoins
- USDC: USD-backed, issued by Circle, widely accepted and transparent
- EURC: Euro-backed stablecoin, also issued by Circle
- USDCE: A bridged version of USDC used on Polygon
Floin Insight
Floin supports multiple stablecoins for transactions, rewards, and trading — including USDC, EURC, and USDCE. Stablecoins offer our users the power of blockchain with the familiarity of traditional money — fast, secure, and always accessible.
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