What is a Stablecoin? (Explained 2025)

Stablecoins are cryptocurrencies designed to maintain a stable value, usually pegged to a fiat currency like USD. This guide explains types, uses, and benefits of stablecoins in 2025.

1. Types of Stablecoins

Fiat-collateralized (USDT, USDC)
Crypto-collateralized (DAI)
Algorithmic stablecoins

2. How Stablecoins Work

Stablecoins use reserves, smart contracts, or algorithms to keep their value stable.

3. Benefits and Risks

Low volatility
Easy transfers
Counterparty risk

Tip: Use stablecoins for trading, remittance, or as a safe haven during market volatility.