Crypto
Stablecoin
A cryptocurrency designed to hold a steady value, usually pegged to a currency like the US dollar.
Also known as: stable coin
Updated June 2026
A stablecoin is a crypto token engineered to keep a constant price — typically 1 token = 1 US dollar — so it can be used for payments and trading without the wild swings of Bitcoin or Ether.
How they hold the peg
- Fiat-backed (e.g. USDC): each token is backed by real dollars/treasuries held in reserve.
- Crypto-backed (e.g. DAI): over-collateralised with other crypto.
- Algorithmic: code and incentives try to maintain the peg — historically the most fragile.
What can break them
A stablecoin is only as trustworthy as its reserves and redemption guarantee. A loss of confidence can trigger a “de-peg” — when the price slips below its target and holders rush to exit.