According to Forbes magazine explanation A stable coin is a cryptocurrency that is pegged to another stable asset, like gold or the U.S. dollar. Its a currency that is global, but is not tied to a central bank and has low volatility. This allows for practical usage of using cryptocurrency like paying for things every single day.
Imagine buying a coin for 2$ today and discovering tomorrow that it should have be 1$ price changes like this can be.
Tether is likely the most stable coin at the moment with a trading volume of about $3,548,100,000, market cap of $2,520,980,231and a supply of 2,507,140,814. There are still some project working on stable coin. A stable coin in a way acts as an asset and not a currency Essentially, it would act as a better link between fiat and other cryptocurrencies, especially in applications such as shopping and a better store and exchange of value.
How is a stable coin achieved?
Stable coin are mostly created out of pegging The stablecoin can be pegged against the US dollar, a consumer price index or other world currencies. Central bank once tackled run away inflation by currency pegg
the peg must be kept up inside a specific band of economic situations. In the detailing of a money peg, what the maker or controller must decide is the sensible furthest reaches of the market band inside which the cash peg can be kept up. You need to choose the band of market conduct that peg can sensibly bolster. For instance, what amount of unpredictability will it withstand? What will be the cost of keeping up the peg? Will there be straightforwardness that enables brokers to watch the genuine economic situations lastly, will it be anything but difficult to dissect the range or band of market conduct inside which the peg can recuperate from unfriendly economic situations?
Every one of these variables are considered when planning a stablecoin. More educative thought and ideas are most welcomed