Understanding Stablecoins: The Backbone of the Crypto Ecosystem

This article provides investors who are new to the crypto space with the most relevant information on stablecoins, which are a crucial component of the crypto ecosystem. It explains the difference between redeemable and algorithmic stablecoins and highlights the dominance of redeemable stablecoins, particularly Tether’s USDT, in the current market. We also discuss the regulatory uncertainty surrounding stablecoins in the United States and the potential risks associated with their use, including the vulnerability of stablecoins to the collapse of payment gateways and the potential depegging of a major stablecoin.