Introduction to Stablecoins and Their Use Cases

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Stablecoins are a special type of cryptocurrency. They're designed to maintain a stable value, often pegged to a fiat currency like the US dollar.

💵 What Is a Stablecoin?

A stablecoin is a digital asset with a price that doesn’t fluctuate wildly.
Examples include:

  • USDT (Tether)

  • USDC (USD Coin)

  • DAI (Decentralized Stablecoin)

🧩 How Do They Work?

  1. Fiat-Backed: Backed 1:1 by real dollars in a bank.

  2. Crypto-Backed: Overcollateralized using crypto assets.

  3. Algorithmic: Use code to control supply (more risky).

🔍 Use Cases

  • Trading without leaving crypto platforms

  • Protecting funds from volatility

  • Remittances and international payments

  • Earning interest on DeFi platforms

Stablecoins combine the best of both worlds: crypto speed and fiat stability.

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