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What is Stablecoin?
A stablecoin is a cryptocurrency pegged to a stable asset (usually the US Dollar). USDT, USDC, and DAI maintain a ~$1 value, providing stability in the volatile crypto market.
Full Explanation
Stablecoins are cryptocurrencies designed to maintain a stable value, usually pegged 1:1 to the US Dollar. Types: fiat-backed (USDT and USDC, backed by dollar reserves), crypto-backed (DAI, over-collateralized with ETH), algorithmic (failed example: UST/LUNA crash of 2022). Stablecoins are crucial for crypto trading (as a quote currency), DeFi (lending/borrowing), and remittances. In India, traders use USDT pairs on Indian exchanges to trade without converting back to INR.
Example
Converting your crypto profits to USDT during a market downturn preserves value without triggering a TDS event from converting to INR.