{"id":347366,"date":"2025-10-04T14:46:05","date_gmt":"2025-10-04T09:16:05","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=347366"},"modified":"2025-10-04T14:46:51","modified_gmt":"2025-10-04T09:16:51","slug":"stablecoins","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/stablecoins\/","title":{"rendered":"Stablecoins"},"content":{"rendered":"<p style=\"text-align: justify\"><strong>News:<\/strong> Finance Minister highlighted that India may not legalize private cryptocurrencies but must \u201cprepare to engage\u201d with stablecoins to avoid exclusion from global financial shifts.<\/p>\n<h2 style=\"text-align: justify\">About Stablecoins<\/h2>\n<figure style=\"width: 300px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/img.etimg.com\/thumb\/msid-124292612%2Cwidth-300%2Cheight-225%2Cimgsize-13798%2Cresizemode-75\/what-stablecoins-actually-do-how-they-work-and-the-hidden-risks-nobody-talks-about.jpg?resize=300%2C224&#038;ssl=1\" alt=\"Stablecoins \" width=\"300\" height=\"224\" \/><figcaption class=\"wp-caption-text\">Source: ET<\/figcaption><\/figure>\n<ul>\n<li>Stablecoins are <strong>a type of cryptocurrency<\/strong> designed to maintain<strong> a stable value<\/strong> by <strong>pegging<\/strong> to fiat currencies, commodities, or financial instruments.<\/li>\n<li style=\"text-align: justify\">They are created <strong>to reduce price fluctuations and provide a more reliable medium of exchange.<\/strong><\/li>\n<li><strong>Depegging: <\/strong>When a <strong>stablecoin falls below its target value<\/strong> for an <strong>extended time<\/strong>, it\u2019s called <strong>depegging<\/strong>.<\/li>\n<li style=\"text-align: justify\"><strong>Types of Stablecoins:<\/strong>\n<ul>\n<li><strong>Fiat-backed Stablecoins: <\/strong>These are <strong>supported by traditional government-issued currencies<\/strong> such as the US dollar.\n<ul>\n<li>To ensure trust, issuers are expected to hold equivalent reserves, which are safeguarded by independent custodians under regular monitoring.<\/li>\n<li>Example: <strong>Tether (USDT)<\/strong>, <strong>USD Coin (USDC)<\/strong>, and <strong>Stasis Euro (EURS)<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Commodity-backed Stablecoins: <\/strong>These stablecoins are <strong>pegged to tangible assets<\/strong> like gold, silver, oil, or even real estate.\n<ul>\n<li>Example: <strong>Pax Gold (PAXG)<\/strong>, <strong>Tether Gold (XAUT)<\/strong> and <strong>Kinesis Silver (KAG)<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Crypto-backed Stablecoins: <\/strong>These coins are<strong> backed by cryptocurrencies.<\/strong>\n<ul>\n<li>They are often overcollateralized to account for crypto\u2019s volatility.<\/li>\n<li>Examples: <strong>Dai (DAI)<\/strong>, <strong>Falcons USD (FAH)<\/strong>, and <strong>USD Bancor (USDB)<\/strong><\/li>\n<\/ul>\n<\/li>\n<li><strong>Algorithmic Stablecoins: <\/strong>These coins\u00a0<strong>use smart contracts and algorithms<\/strong> to automatically adjust supply and demand in order to maintain price stability.\n<ul>\n<li>Example: <strong>Ampleforth (AMPL)<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify\"><strong>Usage: <\/strong>It acts as a <strong>bridge<\/strong> between <strong>traditional finance and the crypto world<\/strong> by enabling payments, remittances, and trading without volatility risks.<\/li>\n<li style=\"text-align: justify\"><strong>Centralization and decentralised issuance:<\/strong>\u00a0Some stablecoins are issued by private companies, while others are decentralized.\n<ul>\n<li style=\"text-align: justify\"><strong>Stability<\/strong> often depends on whether a trusted institution manages issuance and redemption.<\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify\"><strong>Risks: <\/strong>They can face issues like <strong>inadequate reserves, lack of transparency<\/strong>, or systemic risks if widely adopted without <strong>regulation<\/strong>.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News: Finance Minister highlighted that India may not legalize private cryptocurrencies but must \u201cprepare to engage\u201d with stablecoins to avoid exclusion from global financial shifts. About Stablecoins Stablecoins are a type of cryptocurrency designed to maintain a stable value by pegging to fiat currencies, commodities, or financial instruments. They are created to reduce price fluctuations&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/stablecoins\/\">Continue reading <span class=\"screen-reader-text\">Stablecoins<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872,10596,10498],"class_list":["post-347366","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","tag-economic-times","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/347366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=347366"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/347366\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=347366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=347366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=347366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}