Stable coin is also a kind of cryptocurrency that offers a stable value. This makes the way out for the concept of stable coins. Cryptocurrency like Bitcoins, and others have an elevated fluctuation in the price value, which rarely supports or strenuous for monetary practices by people.
When the price highly fluctuates people won’t get the habit of spending and adapting to the digital currency, because in the event that they don’t know of its buying power tomorrow.
For FIAT’s the value depends on the reserves and in case of extreme demand or other cases the central authority will make decisions and control the situations. But the crypto value is volatile and has high fluctuation to adapt. So to bridge between these stable coins is preferred.
FIAT collateralized stable coins maintain a FIAT currency reserve like the US dollars or can be a commodity backed like gold or silver which is much suitable for the monetary values.
Libra by Facebook has recently created a constructive wave and that could be an example for the Stable coins.
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