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Crypto Terms:  Letter S

What is Stablecoin?

Meaning:
Stablecoin - a fixed value cryptocurrency that is generally pegged to a fiat currency or an exchange-traded commodity.
easy
2 minutes

Let's find out Stablecoin meaning, definition in crypto, what is Stablecoin, and all other detailed facts.

Stablecoin is a fixed value cryptocurrency that is pegged to a leading fiat currency, such as the U.S. dollar, or to an exchange-traded commodity, such as gold. Since these coins are actually stable, they are a great tool to lower the price volatility of the whole cryptocurrency market. 

To provide the same price stability as fiat currencies, stablecoin currencies are backed by an underlying asset, usually the one it digitally reflects. For example, Tether (USDT) stablecoin is backed on a 1:1 basis by the U.S. dollar meaning that 1 USDT equals $1.

The amount of available stablecoins and their value has increased dramatically in recent years. Besides, there is a variety of crypto assets that are pegged to other fiat currencies, such as euros, pounds, etc. There are four main types of stablecoins:

  • Non-collateralized stablecoins that use algorithm mechanism and the Seigniorage Shares system to preserve their peg.
  • Commodity-collateralized stablecoins, like Tether Gold (XAUT).
  • Crypto-collateralized stablecoins, like MakerDAO's Dai token.
  • Fiat-collateralized stablecoins, like USDC, USDT, BUSD, etc.

With stablecoins, the possibilities seem to be unlimited. Some projects, such as Diem (previously known as Libra), even tried to allow stablecoins to be used as a type of exchange medium that is backed by a basket of national currencies. 

While new stablecoin-focused legislations are always believed to be on the way, authorities around the world continue to tolerate them due to their high compliance with financial regulatory criteria. Stablecoins have certainly served as a model for central bank digital currencies (CBDC), both in terms of inspiration and strategy.

Stablecoins are extremely simple to acquire and can be found on nearly any cryptocurrency market. In a nutshell, they provide much-needed liquidity and a safe haven for crypto investors. Besides, they are an important part of the whole ecosystem of digital assets.

Proof-of-Stake (PoS)<\/strong><\/a> consensus mechanism, in which users stake their tokens in order to operate as blockchain <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-validator/">validators.","definition":"the act of detaining crypto holdings to gain rewards or earn interest.","status":"published","meta_title":"What is Staking? Definition & Meaning | Crypto Wiki","meta_description":"Staking meaning: Staking - is the act of detaining crypto holdings to gain rewards or earn interest.","meta_keywords":null}" :prev-section="{"id":743,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Spyware","level":"easy","author_id":1,"created_at":"2023-06-19T06:59:00.000000Z","updated_at":"2023-10-30T04:09:24.000000Z","slug":"what-is-spyware","title":"What is Spyware?","section":"S","keyword":"Spyware","content":"<p><strong>Spyware<\/strong> is a type of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-malware/">malicious software (malware)<\/strong><\/a> that can spy on and record the activities of an infected electronic device. Spywares track all activities of the victim to collect sensitive data and forward it to the attacker. The stolen data can be used for various malicious purposes, like identity theft.<\/p>\n<p>There are four main types of spyware:<\/p>\n<ul>\n<li>Adware;<\/li>\n<li>System monitors;<\/li>\n<li>Trackers;<\/li>\n<li><a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-trojan/">Trojans./n/n

Depending on the type of spyware, victims may accidentally be infected by different methods, such as <strong>malicious ads<\/strong>, suspicious emails, and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-phishing/">phishing websites<\/strong><\/a>. Untrustworthy files may also contain spyware or other viruses that can corrupt or compromise the computer system.<\/p>\n<p>Malicious parties use spyware to target users on various crypto networks to acquire their <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-private-key-secret-key/">private keys<\/strong><\/a> and gain access to digital assets. Crypto transactions cannot be reversed, making <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-cryptocurrency/">cryptocurrencies a favorable target for hackers.<\/p>","definition":"malware used to spy on infected electronic devices.","status":"published","meta_title":"What is Spyware? Definition & Meaning | Crypto Wiki","meta_description":"Spyware meaning: Spyware - malware used to spy on infected electronic devices.","meta_keywords":null}" :model="{"id":708,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Stablecoin","level":"easy","author_id":1,"created_at":"2023-06-19T06:59:00.000000Z","updated_at":"2023-10-30T04:09:58.000000Z","slug":"what-is-stablecoin","title":"What is Stablecoin?","section":"S","keyword":"Stablecoin","content":"<p>Stablecoin is a fixed value cryptocurrency that is pegged to a leading <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-fiat/">fiat currency<\/strong><\/a>, such as the U.S. dollar, or to an <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-digital-commodity/">exchange-traded commodity<\/strong><\/a>, such as gold. Since these coins are actually stable, they are a great tool to lower the price volatility of the whole cryptocurrency market.&nbsp;<\/p>\n<p>To provide the same price stability as fiat currencies, <strong>stablecoin currencies are backed by an underlying asset<\/strong>, usually the one it digitally reflects. For example, Tether (USDT) stablecoin is backed on a 1:1 basis by the U.S. dollar meaning that 1 USDT equals $1.<\/p>\n<p>The amount of available stablecoins and their value has increased dramatically in recent years. Besides, there is a variety of crypto assets that are pegged to other fiat currencies, such as euros, pounds, etc. There are four main types of stablecoins:<\/p>\n<ul>\n<li><strong>Non-collateralized stablecoins<\/strong> that use algorithm mechanism and the <a href=https://www.bitdegree.org/"https:////en.wikipedia.org//wiki//Seigniorage/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>Seigniorage<\/strong> <strong>Shares system<\/strong><\/a> to preserve their peg.<\/li>\n<li><strong>Commodity-collateralized stablecoins<\/strong>, like Tether Gold (XAUT).<\/li>\n<li><strong>Crypto-collateralized<\/strong> <strong>stablecoins<\/strong>, like MakerDAO's Dai token.<\/li>\n<li><strong>Fiat-collateralized stablecoins<\/strong>, like USDC, USDT, BUSD, etc.<\/li>\n<\/ul>\n<p>With stablecoins, the possibilities seem to be unlimited. Some projects, such as Diem (previously known as Libra), even tried to allow stablecoins to be used as a type of <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-medium-of-exchange/">exchange medium<\/strong><\/a> that is backed by a basket of national currencies.&nbsp;<\/p>\n<p>While new stablecoin-focused legislations are always believed to be on the way, authorities around the world continue to tolerate them due to their high compliance with financial regulatory criteria. Stablecoins have certainly served as a model for <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-central-bank-digital-currency/">central bank digital currencies (CBDC)<\/strong><\/a>, both in terms of inspiration and strategy.<\/p>\n<p>Stablecoins are extremely simple to acquire and can be found on nearly any cryptocurrency market. <strong>In a nutshell, they provide much-needed<\/strong> <strong>liquidity and a safe haven for crypto investors.<\/strong> Besides, they are an important part of the whole ecosystem of digital assets.<\/p>","definition":"a fixed value cryptocurrency that is generally pegged to a fiat currency or an exchange-traded commodity.","status":"published","meta_title":"What is Stablecoin? Definition & Meaning | Crypto Wiki","meta_description":"Stablecoin meaning: Stablecoin - a fixed value cryptocurrency that is generally pegged to a fiat currency or an exchange-traded commodity.","meta_keywords":null,"author":{"id":1,"user_id":1,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2023-05-11T07:18:20.000000Z","title":"Editor-In-Chief","slug":"aaron-s-editor-in-chief","description":"<p>Having completed a Master&rsquo;s degree on Economics, Politics &amp; Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US&rsquo; Western and Japan&rsquo;s Collective forms of capitalism, 1945-2020.<\/p>\n<p>With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He&rsquo;s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.<\/p>\n<p>Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain &amp; Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.<\/p>\n<p>Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.<\/p>","user":{"id":1,"first_name":"Aaron","last_name":"S.","email":"aaron@bitdegree.org","email_sanitized":"aaron@bitdegree.org","email_verified_at":"2023-12-01T09:40:20.000000Z","must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2641,"referral_token":"05TMu2NysXOCn525","referred_by":null,"created_at":"2023-05-03T14:30:55.000000Z","updated_at":"2024-01-09T15:22:21.000000Z","full_name":"Aaron S."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? The Pros & Cons","status":"published","modified_content":null},{"chapter_id":2,"order":4,"slug":"coin-vs-token","title":"Coin VS Token: How Do They Differ?","status":"published","modified_content":null},{"chapter_id":2,"order":5,"slug":"what-are-stablecoins","title":"What are Stablecoins, Altcoins & Wrapped Coins?","status":"published","modified_content":null},{"chapter_id":2,"order":6,"slug":"what-is-a-bitcoin","title":"Bitcoin: the Pioneer of the Crypto World","status":"published","modified_content":null},{"chapter_id":2,"order":7,"slug":"what-is-ethereum","title":"The Ultimate Blockchain for dApp Creation: Ethereum","status":"published","modified_content":null},{"chapter_id":2,"order":8,"slug":"what-is-cardano-in-crypto","title":"What is Cardano and What is It Used For?","status":"published","modified_content":null},{"chapter_id":2,"order":9,"slug":"what-is-shiba-inu-coin","title":"Shiba Inu: the Dogecoin 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Trailblazer","status":"published","modified_content":null},{"chapter_id":2,"order":16,"slug":"what-is-algorand-crypto","title":"Did Algorand Truly Solve the Blockchain Trilemma?","status":"published","modified_content":null},{"chapter_id":2,"order":17,"slug":"what-is-olympus-dao","title":"Does Olympus DAO Have Anything to Do With Mythology?","status":"published","modified_content":null},{"chapter_id":2,"order":18,"slug":"what-is-avax","title":"Is Avalanche Network (AVAX) Rightfully Called the Future of DeFi?","status":"published","modified_content":null},{"chapter_id":2,"order":19,"slug":"what-is-monero-coin","title":"Monero: Where Cryptocurrency Meets Cryptography","status":"published","modified_content":null},{"chapter_id":2,"order":20,"slug":"what-is-ripple-xrp","title":"Is Ripple \"it\" When it Comes to Cross-Border Transactions?","status":"published","modified_content":null},{"chapter_id":2,"order":21,"slug":"practical-use-of-cryptocurrencies","title":"The Practical Use of 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Standards","status":"published","modified_content":null},{"chapter_id":3,"order":5,"slug":"how-to-buy-crypto","title":"From Fiat to Crypto: How to Buy Crypto for the First Time","status":"published","modified_content":null},{"chapter_id":3,"order":6,"slug":"fiat-to-crypto","title":"Taking Profits: Turning Crypto Into Fiat","status":"published","modified_content":null},{"chapter_id":3,"order":7,"slug":"how-to-use-crypto","title":"You\u2019ve Got Crypto: What Can You Do With It?","status":"published","modified_content":null}]},{"id":4,"title":"Crypto Wallets","slug":"crypto-wallets","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-wallets.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-wallets-101.jpg","rating":80,"sections":[{"chapter_id":4,"order":1,"slug":"what-is-a-crypto-wallet","title":"What is a Crypto Wallet?","status":"published","modified_content":null},{"chapter_id":4,"order":2,"slug":"hot-wallet-vs-cold-wallet","title":"Hot Wallet VS Cold Wallet: Which One to Pick?","status":"published","modified_content":null},{"chapter_id":4,"order":3,"slug":"non-custodial-wallet","title":"What are Non-Custodial Crypto Wallets?","status":"published","modified_content":null},{"chapter_id":4,"order":4,"slug":"what-is-metamask","title":"Metamask: The Leading Non-Custodial Wallet","status":"published","modified_content":null},{"chapter_id":4,"order":37,"slug":"how-safe-is-cryptocurrency","title":"The Key Crypto Wallet Safety Practices: How Safe Can Crypto Be?","status":"published","modified_content":null}]},{"id":5,"title":"NFTs","slug":"nfts","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-nfts.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/nfts-101.jpg","rating":100,"sections":[{"chapter_id":5,"order":2,"slug":"how-to-trade-nfts","title":"NFT Trading: The Ins and Outs","status":"published","modified_content":null},{"chapter_id":5,"order":3,"slug":"buying-nft","title":"Tips and Tricks of Choosing the Right NFTs","status":"published","modified_content":null},{"chapter_id":5,"order":4,"slug":"how-to-store-nft","title":"How to Store NFTs: Best Practices","status":"published","modified_content":null},{"chapter_id":5,"order":5,"slug":"how-to-create-an-nft","title":"How to Create Your Own NFTs?","status":"published","modified_content":null},{"chapter_id":5,"order":6,"slug":"how-to-make-passive-money-with-nft","title":"Making Passive Money with NFTs","status":"published","modified_content":null}]},{"id":6,"title":"dApps & Defi","slug":"dapps-and-defi","updated":true,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-dapps.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/dapps-defi-101.jpg","rating":80,"sections":[{"chapter_id":6,"order":1,"slug":"what-are-nfts","title":"What are Non-Fungible Tokens (NFTs)?","status":"published","modified_content":null},{"chapter_id":6,"order":1,"slug":"what-is-defi","title":"What is Decentralized Finance (DeFi)?","status":"published","modified_content":null},{"chapter_id":6,"order":2,"slug":"what-is-defi-2-0","title":"DeFi 2.0: The New Version of Decentralized Finance","status":"published","modified_content":null},{"chapter_id":6,"order":3,"slug":"what-are-dapps-in-crypto","title":"What Are dApps and How Do They Work?","status":"published","modified_content":null},{"chapter_id":6,"order":4,"slug":"defi-dapps","title":"Picking the Right dApps: Dos and Don'ts","status":"published","modified_content":null},{"chapter_id":6,"order":5,"slug":"what-is-web-3-0","title":"Web 3.0: The Future of the Internet","status":"published","modified_content":null},{"chapter_id":6,"order":6,"slug":"what-are-smart-contracts","title":"What is the Core Purpose of Smart Contracts?","status":"published","modified_content":null},{"chapter_id":6,"order":7,"slug":"what-is-a-dao-in-crypto","title":"The Notion of a Decentralized Autonomous Ogranization (DAO)","status":"published","modified_content":null},{"chapter_id":6,"order":8,"slug":"what-is-staking-in-crypto","title":"What is the Goal of Staking Crypto Assets?","status":"published","modified_content":null},{"chapter_id":6,"order":9,"slug":"what-is-liquidity-pool-in-crypto","title":"What is a Liquidity Pool and How Does It Work?","status":"published","modified_content":null},{"chapter_id":6,"order":10,"slug":"what-is-automated-market-maker","title":"Automated Market Maker: the Cornerstone of the Decentralized Crypto Exchange Industry","status":"published","modified_content":null},{"chapter_id":6,"order":11,"slug":"what-is-yield-farming-in-crypto","title":"The Main Yield Farming 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Cryptocurrencies?","status":"published","modified_content":null},{"chapter_id":7,"order":2,"slug":"how-to-invest-in-crypto","title":"Investing in Crypto: What Investing Options Do You Have?","status":"published","modified_content":null},{"chapter_id":7,"order":3,"slug":"ico-vs-ido","title":"ICO vs IDO vs IEO: Which One is the One?","status":"published","modified_content":null},{"chapter_id":7,"order":4,"slug":"what-is-an-airdrop","title":"What are Crypto Airdrops and How to Get Them?","status":"published","modified_content":null},{"chapter_id":7,"order":5,"slug":"how-to-get-free-crypto","title":"How to Get Free Crypto Assets?","status":"published","modified_content":null},{"chapter_id":7,"order":6,"slug":"how-to-arbitrage-crypto","title":"What is Crypto Arbitrage: The Main Principles","status":"published","modified_content":null},{"chapter_id":7,"order":7,"slug":"what-is-a-perpetual-contract","title":"Perpetual Contracts: Futures Contracts Without an Expiration Date","status":"published","modified_content":null},{"chapter_id":7,"order":8,"slug":"what-is-fud","title":"What is FUD: How to Use It to Your Advantage While Investing in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":9,"slug":"investing-in-cryptocurrency","title":"Investing in Cryptocurrency: How to Manage Your Risks?","status":"published","modified_content":null},{"chapter_id":7,"order":10,"slug":"what-is-a-rug-pull-in-crypto","title":"What is a Rug Pull in Crypto?","status":"published","modified_content":null},{"chapter_id":7,"order":11,"slug":"how-to-avoid-rug-pulls-in-crypto","title":"How to Spot and Avoid Rug Pulls?","status":"published","modified_content":null},{"chapter_id":7,"order":12,"slug":"how-to-avoid-crypto-taxes","title":"The Key Legal Techniques of Avoiding Crypto Taxes","status":"published","modified_content":null}]},{"id":8,"title":"Crypto Analysis","slug":"crypto-analysis","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-analysis.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-analysis-101.jpg","rating":100,"sections":[{"chapter_id":8,"order":1,"slug":"what-is-bullish-and-bearish","title":"Bearish and Bullish Markets: Do They Matter?","status":"published","modified_content":null},{"chapter_id":8,"order":2,"slug":"best-technical-analysis-indicators-for-crypto","title":"5 Best Crypto Technical Analysis Indicators You Must Know About","status":"published","modified_content":null},{"chapter_id":8,"order":3,"slug":"what-is-candlesticks","title":"Technical Analysis: What are Candlesticks, Trendlines, and Patterns?","status":"published","modified_content":null},{"chapter_id":8,"order":4,"slug":"how-to-track-new-crypto-coins","title":"Crypto Tracking: How to Track Your Favorite Coins & Tokens?","status":"published","modified_content":null},{"chapter_id":8,"order":5,"slug":"how-to-research-crypto","title":"Crypto Research Fundamentals & Social Signals: Your Daily Trading Strategy","status":"published","modified_content":null},{"chapter_id":8,"order":46,"slug":"portfolio-diversification-definition","title":"Portfolio Diversification: The Whats, the Whys, and the Hows","status":"published","modified_content":null}]},{"id":9,"title":"Mining","slug":"mining","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-crypto-mining.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-mining-101.jpg","rating":80,"sections":[{"chapter_id":9,"order":1,"slug":"what-is-crypto-mining","title":"Crypto Mining: What It is and How Does It Work?","status":"published","modified_content":null},{"chapter_id":9,"order":2,"slug":"what-is-a-mining-pool","title":"Mining Pools: Is Collective Mining Better Than Solo Mining?","status":"published","modified_content":null},{"chapter_id":9,"order":3,"slug":"what-is-staking-crypto","title":"An Advanced Look into What is Staking Crypto","status":"published","modified_content":null},{"chapter_id":9,"order":4,"slug":"what-is-proof-of-stake-vs-proof-of-work","title":"Proof-of-Work VS Proof-of-Stake: The Differences That Matter","status":"published","modified_content":null},{"chapter_id":9,"order":5,"slug":"what-is-crypto-mining-rig","title":"Crypto Mining Rig: What It is and How to Build One?","status":"published","modified_content":null}]},{"id":10,"title":"Crypto Terms","updated":false,"chapter":"crypto\/assets\/crypto-book\/chapters\/crypto-101-glossary.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/crypto-glossary-101.jpg","rating":100,"sections":["A","B","C","D","E","F","G","H","I","J","K","L","M","N","O","P","Q","R","S","T","U","V","W","X","Y","Z"]}]" current-chapter="S" current-section="what-is-stablecoin">