Stablecoins

Stablecoins

Real-World Assets • Bullion • Physical Collateral

dollar-pegged tokens bridging crypto and traditional finance

Stablecoins are cryptocurrencies designed to maintain a consistent value—typically pegged to fiat currencies like the U.S. dollar. They function as a reliable medium of exchange, store of value, and unit of account within the crypto ecosystem, reducing volatility risks associated with traditional crypto assets. Stablecoins serve as a crucial bridge between traditional finance and decentralized platforms.

Use Case: A DeFi user might park assets in $USDC during volatile market conditions to preserve capital while earning yield through lending or farming protocols until market sentiment improves.

Key Concepts:

• $USDC — Fiat-backed stablecoin pegged 1:1 to the U.S. dollar, backed by regulated reserves
• $RLUSD — A regulated stablecoin offering transparency and compliance
• $USD1 — Currency One’s USD stablecoin, pegged 1:1 to the dollar
• Algorithmic Stablecoin — Supply-adjusting tokens aiming to maintain a peg without direct backing
• $USDT — Largest stablecoin by market cap, with ongoing transparency concerns
• Depegging — When a stablecoin loses its 1:1 peg to the underlying asset
• CBDC — Central Bank Digital Currencies, government-issued competition to stablecoins
• Yield-Bearing Stablecoin — Stablecoins that generate returns from underlying treasury or DeFi yield

Summary: Stablecoins are foundational tools in DeFi and digital payments, enabling liquidity, risk hedging, and cross-chain value transfers. Their type and trustworthiness vary widely—from transparent, regulated tokens like RLUSD to controversial issuers like USDT. Understanding their structure is essential for safe navigation across crypto and financial markets.