stablecoin
Stablecoin (noun) means a cryptocurrency designed to stay at a fixed value, usually one unit to one US dollar, rather than rising and falling like other coins. The peg is maintained by holding reserves of money or other assets, or by rules written into software. Example: “She moved her funds into a stablecoin while she decided what to do next.”
How to Use Stablecoin
Learner’s notesIn plain EnglishA digital coin meant to always be worth about the same as a normal currency, usually a dollar.
Neutral technical term, now common in financial reporting and in regulation.
"Stable" describes the design goal, not a guarantee. Pegs have failed in practice, and the word does not promise that a given coin will hold its value.
Trace the full origin ↓Fill the Gap
Can you complete this real example?
She moved her funds into a _____ while she decided what to do next.
Etymology
A compound of stable and coin, so called because it is designed to hold a steady value.
Synonyms
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Rhymes for stablecoin
See all rhymes for stablecoin →Frequently Asked Questions
What is the difference between a stablecoin and normal money?
A stablecoin aims to track a normal currency but is issued by a private company or a piece of software and moves on a blockchain. Ordinary bank deposits are claims on a regulated bank, often covered by a deposit protection scheme; stablecoin holders' rights depend on the issuer's terms and the law where it operates.
What is the difference between a fiat-backed and an algorithmic stablecoin?
A fiat-backed stablecoin is meant to be covered by reserves of cash and similar assets held by the issuer. An algorithmic one tries to hold its price through rules in software that expand or shrink supply, without full reserves behind it. Several algorithmic designs have lost their peg.
What does it mean when a stablecoin depegs?
Depegging means the coin trades away from the value it is supposed to track, for example at 95 cents instead of a dollar. It usually happens when holders doubt the reserves or the mechanism and try to sell or redeem at once.