Glossary
What is a stablecoin?
A crypto asset designed to hold a steady value against a reference currency, usually the US dollar.
Stablecoins maintain their peg either by holding reserves against every unit issued, or algorithmically through supply adjustments and collateral.
Why it matters
“Stable” describes an intention, not a guarantee. Reserve-backed coins depend on the quality and liquidity of what backs them and on the issuer’s willingness to honour redemptions; several have briefly lost their peg during market stress. Algorithmic designs have failed outright and catastrophically. What matters when comparing them is what backs each unit, who verifies it and how often, who can redeem at par, and under what circumstances redemption can be suspended.