What are stablecoins?
Stablecoins are a form of cryptoasset typically pegged to a traditional fiat currency, such as a US dollar to maintain a stable value. For example, if pegged to a dollar, one stablecoin would always be worth the equivalent of one US dollar.
Is Bitcoin a stablecoin?
No, Bitcoin, like other cryptocurrencies have a volatile value. As stablecoins are pegged to a fiat currency, they are much more “stable”.
Are stablecoins cryptocurrency?
Technically speaking, stablecoins are considered cryptocurrencies whose price is pegged to a reference asset, such as fiat money, exchange-traded commodities, or a more widely-considered cryptocurrency like Bitcoin. Much like the name suggests, the aim of stablecoins is to offer all of the benefits of cryptocurrencies, but without the volatility.
Are stablecoins regulated?
This depends on the specific region, and country, but generally speaking, stablecoins are either regulated or in the process of being so. In the UK, for example, the UK government has announced its intention to legislate stablecoins. The move will see stablecoins brought within the payment’s regulatory perimeter, thereby creating conditions for stablecoins issuers and service providers to operate and invest in the UK.
