What are Stablecoins?

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About Stablecoins:

They are cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity, or financial instrument.
Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies, including Bitcoin (BTC).
Unlike cryptocurrencies like Bitcoin, stablecoins’ prices remain steady, in accordance with whichever fiat currency backs them.
Eg: USDC stablecoin is backed by dollar-denominated assets.
Benefits:
- They are open, global, and accessible to anyone on the internet.
- They’re fast, cheap and secure to transmit.

What is Cryptocurrency?

Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds.
These currencies operate independently of a central bank.
The economic transactions underlying cryptocurrency are decentralized, distributed and disbursed.
The first and most famous cryptocurrency, bitcoin was introduced in 2009.
Technology:
- Most cryptocurrencies are built on blockchain technology.
- Blockchain is a decentralized and distributed database on a peer-peer network which works on the basis of a consensus mechanism involving every node (computer) on the network.
- Blockchain is a peer-to-peer distributed network that records a public history of transactions without actually recording identities of the parties or the transaction details.

Q1) What is USDC?

USD Coin (USDC) is a digital currency that is fully backed by U.S. dollar assets. USDC is a tokenized U.S. dollar, with the value of one USDC coin pegged 1:1 to the value of one U.S. dollar. The value of USDC is designed to remain stable, making USDC a stablecoin.

Source: How US draft bill on crypto will help stablecoin holders and issuers