A Stable Coin is a new class of Cryptocurrencies that attempts to offer price stability and are backed by a reserve asset. Stable Coins have gained traction as they attempt to offer the best of both world’s—the instant processing and security or privacy of payments of Cryptocurrencies, and the volatility-free stable valuations of fiat currencies.
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Stablecoins are designed in such a way that they can absorb reasonable fluctuations while holding a fixed worth. In a way, when it comes to real-world applicability, they act more like strong fiat currencies such as the US dollar, but then with the benefits of cryptocurrency.
Mainly, there are three kinds of stablecoins: Crypto collateralised, Fiat collateralised, Non-collateralised.
Stablecoins can be used as some other currency for everyday purposes. From purchasing food items to moving to transfer funds, we can use a digital wallet to pay with stable coins.
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