Fiat-Collateralised Stablecoin Definition - Glossary

Fiat-Collateralised Stablecoin A stablecoin backed by real-world fiat currency reserves like USD, ensuring value stability.

Fiat-Collateralised Stablecoin A fiat-collateralised stablecoin is a type of cryptocurrency designed to maintain a stable value. It achieves this by being backed by reserves of traditional fiat currencies, such as the US dollar or euro, held in a bank or a trusted custodian. This backing ensures that each stablecoin is redeemable for a specific amount of fiat currency. This stability makes them useful for trading, remittances, and as a store of value. Fiat-collateralised stablecoins provide the benefits of digital currency without the volatility commonly associated with traditional cryptocurrencies.