Stablecoin

Stablecoin in more detail

A stablecoin is a token designed to hold a fixed value, usually one US dollar. It lets people move dollars on a blockchain without the price swings of bitcoin or ether. Stable is the goal, not a guarantee.

Blockchains run all day, every day. Bank transfers do not. Stablecoins let traders move between crypto and something dollar-like in seconds. People also use them to send money abroad and to hold dollars where local currencies are weak.

TerraUSD, May 2022. This algorithmic stablecoin lost its dollar value and fell close to zero within days, along with its sister token. About $40 billion in market value was wiped out. A US jury later found the company and its founder liable for fraud.