Stablecoin

A stablecoin is a type of cryptocurrency where the value of the digital asset is supposed to be pegged to a reference asset, which is either fiat money, exchange-traded commodities (such as precious metals or industrial metals), or another cryptocurrency.^[1]

In theory, 1:1 backing by a reference asset could make a stablecoin value track the value of the peg and not be subject to the radical changes in value common in the market for many digital assets.^[2] In practice, however, stablecoin issuers have yet to be proven to maintain adequate reserves to support a stable value^{[neutrality is disputed]} and there have been a number of failures with investors losing the entirety of the (fiat currency) value of their holdings.^{[citation needed]}