What are fiat-backed stablecoins?

Fiat-backed stablecoins As the name implies, fiat stablecoins are tokens which are associated with the value of a particular fiat currency. Usually, these tokens are based on the US dollar and hold their value fixed at a 1:1 ratio. The strengths of fiat stablecoins

What are the different types of stablecoins?

The most popular types of stablecoins are "fiat-backed" meaning they are digital assets that have financial reserves in fiat currency held by a regulated institution like a traditional bank. In short, compared to its three other counterparts, fiat-backed stablecoins are truly backed by real-world currencies.

What are non-collateralized stablecoins?

Non-collateralized stablecoins. While cryptocurrency-backed and non-collateralized stablecoins exist and are gaining traction, the most common – and by far the most well-known – stablecoins are the fiat-backed cryptocurrencies; pegged to a national currency.

What are the most popular stablecoins in the crypto market?

Fiat-backed stablecoins are not the only stablecoins in the crypto market, although they are the most popular and commonly used stablecoins. You can also find crypto-pegged stablecoins and algorithm-backed stablecoins as the new alternatives to fiat-backed stablecoins.