What is a stablecoin?

A stablecoin is a cryptocurrency designed to hold a steady value — almost always about $1. The best-known are Tether (USDT) and USD Coin (USDC).

Why would you want a coin that doesn't move?

Stablecoins are the "cash" of crypto. Traders park money in them between trades without cashing out to a bank, and people use them to send dollars across the world quickly. Because they don't swing like Bitcoin, they're used for stability, not growth.

How do they stay at $1?

Most are backed by reserves — real dollars, bonds, or similar assets — that the issuer holds to match the coins in circulation. Others use algorithms. The key question is always: is it actually backed, and by what?

The risk people forget

"Stable" doesn't mean "risk-free." A stablecoin can lose its $1 peg ("de-peg") if its backing is doubtful or the market panics — which has happened before. Understanding what backs a stablecoin matters more than its steady price.