--- title: Stablecoin url: "https://www.unknowngravity.com/en/glosario/stablecoin" site: Unknown Gravity published: "2025-06-07T15:12:57+00:00" modified: "2026-07-15T10:51:28+00:00" language: en-US description: "Stablecoin It is a type of cryptographic token designed to maintain stable parity with an underlying asset, such as a fiat currency (USD, EUR), a commodity (gold) or a basket of assets." section: "Home > Stablecoin" --- # Stablecoin GLOSSARY · BLOCKCHAIN & WEB3 Cryptocurrency designed to maintain a stable value, generally backed by assets or algorithms. WHAT IS IT? · FOR DUMMIES A **Stablecoin** is a **digital currency that is always worth almost the same**, like 1 dollar or 1 euro. It is used to buy, sell or store money in the crypto world without worrying that it will rise or fall much in value as is the case with other cryptocurrencies. It's like having a digital version of traditional money, but on the blockchain. WHAT IS IT? · PRO A **Stablecoin** is a type of **cryptographic token designed to maintain stable parity with an underlying asset**, such as a fiat currency (USD, EUR), a commodity (gold) or a basket of assets. Its objective is **eliminate the inherent volatility of traditional cryptocurrencies** (such as Bitcoin or Ethereum), providing a **unit of account, medium of exchange and store of most predictable value** within the blockchain ecosystem. There are several types of stablecoins depending on their stability mechanism: 1. **Fiat-collateralized**: backed 1:1 by traditional currency reserves in regulated banks or custodians. Ex.: **USDC**, **USDT**, **EURC**. 2. **Crypto-collateralized**: backed by cryptoassets locked in smart contracts, with overcollateralization to absorb volatility. Ex.: **DAI** (backed by ETH, wBTC and others). 3. **Algorithmic**: they use supply-demand algorithms and mechanisms to maintain parity, without direct asset support. Ex.: **FRAX**, **AMPL**. 4. **Commodities-backed**: linked to physical goods such as gold, oil or precious metals. Ex.: **PAXG** (gold), **XAUT**. In terms of functionality, stablecoins are widely used in: - **Trading and arbitrage** on exchanges (DEX and CEX). - **Cross-border payments** and low-cost remittances. - **DeFi systems**, such as collateral, loans, liquidity pools and yield farming. - **Asset tokenization** as a stable unit of account. - **Volatility hedging** crypto. From a regulatory standpoint, stablecoins are under increasing scrutiny for their systemic impact, especially fiat-collateralized ones. Regulations such as **MiCA in the EU**, and stablecoin frameworks in the United States, set requirements on **reserves, transparency, liquidity and governance**, distinguishing between **EMTs (e-money tokens)** and **ARTs (asset-referenced tokens)**. ## 01 / Key points - It is a token whose value is linked to a stable asset such as the dollar, euro or gold - It reduces volatility and facilitates its use as digital money in blockchain - There are several types: backed by fiat, crypto, commodities or algorithms - They are widely used in payments, DeFi, trading and as a safe haven of value - Regulated in some countries for their use as a means of payment or investment ## 02 / Advantages - **Value stability** versus other volatile cryptocurrencies - **Facilitates payments and everyday operations** in the Web3 ecosystem - **High liquidity and compatibility** with DeFi protocols and exchanges - **Globally accessible without the need for banks** traditional - **Strong base for asset tokenization and crypto debt issuance** ## 03 / Disadvantages - **Dependency on external guardians or reserves** (on fiat-backed) - **Risk of loss of parity** If the economic or technical model fails - **Increasing Regulation and Legal Risk** for issuers and users - **Limited transparency** in some unaudited projects - **Not always resistant to extreme events or market panics** RELATED CONCEPTS [Fungible Token](/en/glosario/token-fungible) [Token](/en/glosario/token) [Cryptocurrency](/en/glosario/criptomoneda) [DeFi (Decentralized Finance)](/en/glosario/defi-finanzas-descentralizadas) KEEP LEARNING [Gold-based cryptocurrencies: How they work and which ones exist](/en/articulos/criptomonedas-oro-funcionamiento-tipos) [DeFi: What decentralized finance is and how does it work](/en/articulos/defi-que-son-como-funcionan-finanzas-descentralizadas) [Tokenomics that work: How to design an economy that doesn't collapse in 6 months](/en/articulos/tokenomics-que-funcionan-como-disenar-una-economia-que-no-se-derrumbe-en-6-meses) [What assets can you (really) tokenize? From theory to real cases](/en/articulos/que-activos-puedes-tokenizar-de-verdad-de-la-teoria-a-los-casos-reales) [Commodity tokenization: gold, silver, wine, energy and more](/en/articulos/tokenizacion-de-materias-primas-oro-vino-energia-y-otros-activos-fisicos-en-blockchain) RELATED SERVICES [Token development](/en/servicios/desarrollo-de-tokens) [Token issuance](/en/servicios/emision-de-tokens) [Asset tokenization](/en/servicios/tokenizacion-activos) [Blockchain protocol development](/en/servicios/desarrollo-de-protocolos-blockchain) [Crypto Payment Gateway](/en/servicios/pasarela-de-pagos-crypto) [Full glossary](/en/glosario) This entry is informative. It is not legal, tax or investment advice. The rules cited change: check the current version on [BOE](https://www.boe.es) and [EUR-Lex](https://eur-lex.europa.eu).