Types of Stablecoins. AI-Generated.
1. Fiat-Backed Stablecoins: The Simple Ones
Imagine putting a dollar in a bank and getting a digital token in return - that's how fiat-backed stablecoins work. For every digital coin created, there's real money stored in a bank account. Popular examples include Tether (USDT), worth exactly one dollar, and USD Coin (USDC), backed by real U.S. dollars.