What are Stablecoins

Stablecoins are tokens that are designed to keep their price parity with another asset. For example, a token pegged to the US Dollar at a 1:1 ratio should always be interchanged for the same amount in USD Dollars. 

Stablecoins maintain their exchange rate constant.

In the crypto, the main advantage of stablecoins is the reduction of price volatility that is typical associated with crypto-currencies (e.g. Bitcoin, Ethereum, etc.). Keeping the price stable is especially important when establishing contracts that pay for services or/and goods at a future date. It is also important to be able to accurately perform accounting, budgeting, and paying taxes in a predictable manner.

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