Stablecoins Explained
A stablecoin is a crypto token designed to hold a steady value, usually a dollar. Its safety depends entirely on what is actually backing that promise.
Crypto that tries to stand still
Stablecoin
A cryptocurrency engineered to keep a constant value — typically one coin equals about one dollar — by holding reserves or using other mechanisms.The key question for any stablecoin is 'what actually backs it?' Real audited reserves behave very differently under stress from a promise or an algorithm.
Recall check from the same lesson
All stablecoins are safe because they are always fully backed by real reserves.
Review the explanation
Answer: False. Backing varies widely; some issuers hold less than claimed and some algorithmic designs have failed, so a peg's safety depends entirely on what actually backs it.
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