Glossary · from the DESK dictionary
Stablecoin
A cryptocurrency designed to maintain a stable value, usually pegged to a fiat currency such as the US dollar.
In plain words
A digital dollar (or other currency) on the blockchain — meant to offer crypto's benefits without its typical price swings.
In more detail
Different mechanisms exist: fiat-backed (e.g. USDC, backed by real dollar reserves), crypto-backed, and algorithmic stablecoins — the latter are considered riskier, as the 2022 collapse of TerraUSD illustrated.
What it means for traders
A crucial bridge between the traditional financial system and crypto markets, important for DeFi and trading.
Common pitfalls
Not all stablecoins are actually fully and transparently backed — losing the peg ('de-peg') is a real risk.
Related terms
Algorithmic Stablecoin · Collateralized Stablecoin · DeFi (Decentralized Finance) · Do Kwon · Pegged Currency
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.