Stablecoins are a crucial part of the cryptocurrency ecosystem, providing a bridge between digital assets and traditional finance. These digital currencies are pegged to real-world assets, such as the US dollar or gold, to maintain stability.
The main advantages of stablecoins include:
Price Stability: Unlike volatile cryptocurrencies like Bitcoin, stablecoins maintain a relatively fixed value.
Faster Transactions: They enable quick and low-cost cross-border transactions.
Integration with DeFi: Many DeFi protocols use stablecoins for lending, borrowing, and staking.
Popular stablecoins include USDT (Tether), USDC (USD Coin), and DAI. However, regulatory scrutiny is increasing, with governments seeking to impose stricter controls to prevent fraud and ensure transparency.
