Stable Coin

A Stable Coin is a cryptocurrency that's pegged to the US Dollar. This means its value is the same as a dollar. This is typically done by a company holding US Dollar assets in the same amount of stable coins they've issued. When someone buys the token with dollars, the stable coin is created and destroyed the coin when thetoken when the coin is sold.

Advantages

Better interest rates available

You hold the money and not the banks

Can move the money easier than from a bank in times of market stress

Cheaper to transact in over credit cards or other payment mechanisms

Disadvantages

Some stable coins might not be backed by dollars but by debt

With the current inflation, the coins lose value based on the rate of inflation

There can be fees associated with the purchase and sale especially when converting back and forth to other cryptos

Stable coins

USDC

Tether

Deeper Learning

Open an account on CoinBase

Link to a bank account

Convert your money to USDC

Collect interest on your money