How Stablecoins Merge Traditional and Decentralized Finance

Posted on by American Coins & Gold

How Stablecoins Merge Traditional and Decentralized Finance
Stablecoins, a term referring to cryptocurrencies that are pegged to fiat currencies, such as the U.S. dollar, first came to the scene in 2014. Tether (USDT), originally called realcoin, was launched as the first stablecoin that year. At the time, it was a very unique product, designed to bring the stability of the dollar (and other government-backed currencies) to the cryptocurrency ecosystem.Today, there are three main types of stablecoins: fiat-backed coins, crypto-backed coins and algorithmic coins. Fiat-backed stablecoins are cryptocurrencies that are collateralized 1:1 with a specific fiat currency. Crypto-backed stablecoins are backed with a specific cryptocurrency, while algorithmic stablecoins…