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Stablecoins Explained: The Sword of Damocles or the Haven for Investors?

Stablecoins Explained: The Sword of Damocles or the Haven for Investors?

A stablecoin, as its name suggests, is a cryptocurrency that is built to retain a stable value. Stablecoin can be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals). The need for a stablecoin is obvious. These asset-backed cryptocurrencies are stabilized by assets that fluctuate outside of the cryptocurrency space, that is, the underlying asset is not correlated, reducing financial risk. However, these stablecoins don’t always…