{"id":8759,"date":"2025-07-23T12:20:18","date_gmt":"2025-07-23T06:50:18","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=8759"},"modified":"2025-07-24T11:16:11","modified_gmt":"2025-07-24T05:46:11","slug":"what-are-stablecoins","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-are-stablecoins\/","title":{"rendered":"Stable Coins"},"content":{"rendered":"<h2><b>Stable Coins Latest News<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The US House of Representatives recently passed the Genesis Act, a bill to regulate US dollar-pegged stablecoins.<\/span><\/p>\n<h2><b>About Stable Coins<\/b><\/h2>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Stablecoins are a <\/span><b>type of cryptocurrency <\/b><span style=\"font-weight: 400;\">whose <\/span><b>value is pegged to another asset,<\/b> <b>such as a fiat currency or gold,<\/b> <b>to maintain a stable price.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">They strive to provide an <\/span><b>alternative to the high volatility of popular cryptocurrencies, <\/b><span style=\"font-weight: 400;\">making them potentially more<\/span><b> suitable for common transactions.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Stablecoins can be <\/span><b>utilized in various blockchain-based financial service<\/b><span style=\"font-weight: 400;\">s and can even be <\/span><b>used to pay for goods and services.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Although the term \u201cstablecoin\u201d is commonly used, there is <\/span><b>no guarantee that the asset will maintain a stable value <\/b><span style=\"font-weight: 400;\">in relation to the value of the reference asset when traded on secondary markets or that the reserve of assets, if there is one, will be adequate to satisfy all redemptions.<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Types of Stablecoins: <\/b><span style=\"font-weight: 400;\">There are primarily <\/span><b>three types<\/b><span style=\"font-weight: 400;\"> of stablecoins: <\/span><b>fiat-collateralized, crypto-collateralized, and non-collateralized (algorithmic).\u00a0<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>Fiat-collateralized<\/b> <b>stablecoins <\/b><span style=\"font-weight: 400;\">are <\/span><b>pegged to<\/b><span style=\"font-weight: 400;\"> a specific asset, such as a <\/span><b>fiat currency. <\/b><span style=\"font-weight: 400;\">\u00a0The <\/span><b>entity <\/b><span style=\"font-weight: 400;\">behind the stablecoin <\/span><b>maintains a reserve of the asset<\/b><span style=\"font-weight: 400;\"> or assets backing the stablecoin, supporting the value of the digital currency.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">On the other hand, <\/span><b>non-collateralized (algorithmic) stablecoins use software algorithm<\/b><span style=\"font-weight: 400;\">s to <\/span><b>automatically adjust the supply <\/b><span style=\"font-weight: 400;\">of the stablecoin <\/span><b>based on demand<\/b><span style=\"font-weight: 400;\">, aiming to maintain a stable price.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>What is Cryptocurrency?<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\"><strong><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/cryptocurrency\/\" target=\"_blank\">Cryptocurrencies<\/a> <\/strong>are <\/span><b>digital or virtual currencies<\/b><span style=\"font-weight: 400;\"> in which <\/span><b>encryption techniques are used to regulate the generation of their units and verify the transfer of funds.<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These currencies <\/span><b>operate independently of a central bank.<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The economic <\/span><b>transactions <\/b><span style=\"font-weight: 400;\">underlying cryptocurrency <\/span><b>are decentralized, distributed, and disbursed.<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>first and most famous <\/b><span style=\"font-weight: 400;\">cryptocurrency,<\/span><b> Bitcoin<\/b><span style=\"font-weight: 400;\"> was introduced in 2009.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><b>Technology<\/b><span style=\"font-weight: 400;\">:<\/span>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Most cryptocurrencies are built on <\/span><b><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/blockchain-technology\/\" target=\"_blank\">blockchain technology<\/a>.<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Blockchain is a <\/span><b>decentralized and distributed database on a peer-to-peer network <\/b><span style=\"font-weight: 400;\">which works on the basis of a <\/span><b>consensus mechanism involving every node (computer) on the network.<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\">Blockchain is a peer-to-peer distributed network that <b style=\"font-size: inherit;\">records a public history of transactions without actually recording identities of the parties or the transaction details.<\/b><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Source<\/b><span style=\"font-weight: 400;\">: <\/span><a href=\"https:\/\/www.newsonair.gov.in\/us-house-passes-genius-act-to-regulate-dollar-pegged-stablecoins\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">NOA<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stable Coins are cryptocurrencies whose value is pegged to that of another currency or financial instrument. Read more about Stable Coins, Meaning, Goals, Examples, Latest News<\/p>\n","protected":false},"author":5,"featured_media":56436,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[21,1759,22,23],"class_list":{"0":"post-8759","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-prelims-pointers","9":"tag-stable-coins","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/8759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=8759"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/8759\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/56436"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=8759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=8759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=8759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}