What they are
Stablecoins are cryptocurrencies designed to keep a stable value, usually 1 US dollar. The best known are USDT (issued by Tether) and USDC (issued by Circle). Each company says it holds reserves to make sure every coin is worth 1 dollar.
Because they don't swing in price like Bitcoin, they're the most widely used for payments, remittances and holding value in dollars.
What to watch out for
- They depend on the issuer: your trust rests on the reserves and on the company issuing the coin.
- The issuer can freeze coins at specific addresses, for example under a court order.
- In times of crisis, the price can drift away from 1 dollar for a while.
- They're denominated in dollars: if you live in another currency, their value in your local currency follows the exchange rate.
At Kripto Pay
Stablecoins are at the heart of the first version of the wallet and of payments for businesses, because the amount agreed at the time of payment is the same amount that arrives.