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34 Bitcoin Terms A to Z

Term 26 - Stable Coin

A Stable Coin is a cryptocurrency that's pegged to the US Dollar. This means its value is the same as a dollar. This is typically done by a company holding US Dollar assets in the same amount of stable coins they've issued. When someone buys the token with dollars, the stable coin is created and destroyed the coin when thetoken when the coin is sold.

  • Better interest rates available
  • You hold the money and not the banks
  • Can move the money easier than from a bank in times of market stress
  • Cheaper to transact in over credit cards or other payment mechanisms

  • Some stable coins might not be backed by dollars but by debt
  • With the current inflation, the coins lose value based on the rate of inflation
  • There can be fees associated with the purchase and sale especially when converting back and forth to other cryptos

    Stable coins
  • USDC
  • Tether

    Deeper Learning
  • Open an account on CoinBase
  • Link to a bank account
  • Convert your money to USDC
  • Collect interest on your money

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