Q. Consider the following statements regarding Stablecoins:
1.They are cryptocurrencies whose value is pegged to another asset, which may include fiat currencies, commodities, or even other cryptocurrencies.
2.Unlike cryptocurrencies such as Bitcoin, the value of all stablecoins is always perfectly stable and guaranteed by their issuers.
3.When a stablecoin falls below its target value for an extended time, it’s called depegging.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation: 1 and 3 only
Statement 1 is correct: Stablecoins are a type of cryptocurrency designed to maintain a stable value by pegging to fiat currencies, commodities, or financial instruments, aiming to offer a less volatile alternative to cryptocurrencies like Bitcoin.
Statement 2 is incorrect: Although stablecoins aim for price stability, there is no guarantee that their value is always stable or that issuers can always maintain the peg.
Statement 3 is correct: When a stablecoin falls below its target value for an extended time, it’s called depegging.
Source: ET
