What are Stablecoins?

A stablecoin is defined as a cryptocurrency class offering price stability and is backed by a real-world asset. A stable coin doesn’t fluctuate similar to the other cryptos like bitcoin or ether. Pegged to other assets like the US dollar or Gold they offer fixed value compared to normal cryptocurrencies. With a stable valuation like Fiat currency, they offer mobility and utility like cryptocurrency.

Most of the stablecoins are pegged at a ratio of 1:1 with fiat currencies like Euro or US dollars that can be traded on exchanges.