What is Stablecoin?

A stablecoin is a digital currency created with the intent of holding a stable value. The value of most existing stablecoins is tied directly to a predetermined fiat currency or tangible commodity, like Gemini dollar (GUSD), which is pegged 1:1 to the U.S. dollar. However, stablecoins can also achieve price-stability through collateralization against other cryptocurrencies or algorithmic token supply management. Since stablecoins do not fluctuate significantly in price, they are designed to be used rather than as an investment.