How are you all Hope everyone is doing well in the eternal mercy of the Most Merciful Creator. Today we will discuss about What is Stablecoins ? I will try to have a brief informative discussion today.

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Stablecoins are cryptocurrencies whose value is pegged or tied to other currencies, commodities or financial instruments. Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies, including Bitcoin, which has made crypto investments less suitable for ordinary transactions.
Although Bitcoin remains the most popular cryptocurrency, it tends to suffer from high volatility in its price or exchange rate. For example, the price of Bitcoin rose from just over $5,000 in March 2020 to over $63,000 in April 2021 only to drop nearly 50% over the next two months. Intraday swings can also be wild; Cryptocurrencies often move more than 10% in a matter of hours.

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Some argue that stablecoins are a solution to the problem due to the widespread availability and acceptance of the US dollar. On the other hand, many cryptocurrency adherents believe that the future belongs to digital tenders that are not controlled by central banks. There are three types of stablecoins based on the process used to stabilize their value.
Stablecoins attempt to peg their market value to some external reference, usually a fiat currency. They are more effective as a medium of exchange than more-volatile cryptocurrencies. Stablecoins can be pegged to a currency like the US dollar or the value of a commodity like gold, or an algorithm can be used to control supply. They maintain reserve assets as collateral or through algorithmic formulas that are supposed to control supply.
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