#explain-card [[Stablecoin|Stablecoins]] are a category of cryptocurrencies designed to minimize price volatility by pegging their value to a stable asset, such as a fiat currency or commodity. They combine the benefits of cryptocurrencies with the stability of traditional assets. ## Types of Stablecoins - Fiat-Collateralized Stablecoins: Backed by reserves of fiat currency (e.g., USD, EUR) - Crypto-Collateralized Stablecoins: Backed by other cryptocurrencies - Commodity-Collateralized Stablecoins: Backed by physical assets like gold or oil - Algorithmic Stablecoins: Use algorithms to control supply and stabilize price ## Popular Stablecoins - Tether (USDT) - USD Coin (USDC) - Dai (DAI) - [[Binance]] USD (BUSD)