USD Coin

USD Coin FAQs

• 1. Why should I buy a stablecoin such as USD Coin?

  Primarily, a stablecoin such as USD Coin acts as a medium of exchange in the crypto community, allowing users in the community to buy and sell cryptocurrencies of his/her choice at any given time. Other than that, stablecoins such as USD Coin offer a financial hedge for people from high inflation economies with a more stable currency in the form of crypto.
• 2. Should I buy USD Coin now?

  It is important to remember that even a stablecoin like USD Coin can be subject to extreme market conditions, legal policies, project team management and other unpredictable factors. As such, it is important to manage your own financial portfolio and risk level. Users are advised to do your own research when making investment decisions in the crypto market.
• 3. How can the value of stablecoins such as USD Coin be maintained?

  There are three types of stablecoins in the market: fiat-backed, crypto-collateralized and algorithmic.
  
  Fiat backed stablecoins are maintained by cash reserves of a fiat currency such as USD or EUR, whereas crypto collateralized stablecoins are pegged to holdings of other cryptocurrencies such as BTC or ETH, instead of fiat currencies.
  
  The most controversial of all would be algorithmic stablecoins, which are built on a blockchain and rely on a supply-and-demand algorithm to maintain the 1:1 price peg. As the demand increases to drive the price up, the protocol issues more supply to drop the price back to its pegged $1.00 price, and vice versa.