Cryptocurrencies designed to minimize price volatility by pegging their value to a stable asset, such as a fiat currency or commodity.
Stablecoins are a class of cryptocurrency engineered to maintain a stable market price, usually by being pegged to a reserve asset. Common pegs include national currencies like the U.S. dollar, or commodities like gold. The mechanism for maintaining the peg can vary, involving collateralization with actual reserves, algorithmic adjustments, or a combination of both. This stability is intended to make them more suitable for everyday transactions and as a medium of exchange compared to more volatile cryptocurrencies.