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What do we call a coin designed to peg its value to a fiat currency in order to minimize the volatility typically associated with cryptocurrencies?

Written By Tuesday, February 20, 2024 Add Comment


Question: What do we call a coin designed to peg its value to a fiat currency in order to minimize the volatility typically associated with cryptocurrencies?

We call such a coin a stablecoin. A stablecoin is a cryptocurrency whose value is pegged to the value of a fiat currency, such as the U.S. dollar or euro, and backed by reserves in that currency². Stablecoins provide a way to store value within the cryptocurrency market without worrying about the fluctuations of cryptocurrencies like bitcoin². Some examples of fiat-backed stablecoins are Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).

Tags Question-answer What do we call a coin designed to peg its value to a fiat currency in order to minimize the volatility typically associated with cryptocurrencies?

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