A cryptocurrency deliberately designed to hold a steady value, usually pegged to the US dollar.
Most cryptocurrencies are known for volatile price swings, but a stablecoin is designed specifically to avoid that, typically pegged one-to-one to the US dollar and backed by reserves meant to hold that peg steady. They're widely used as a way to move money within the crypto world without constantly converting back to traditional currency, and as a bridge between crypto trading and the regular financial system. Their reliability depends entirely on whether the reserves backing them are actually there and properly managed, which has been the center of several major controversies in the industry.
Part of the Open Bell Glossary — plain-English explanations of the terms that come up on the show. Browse every term.