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A stablecoin is a digital version of traditional currency (like USD or EUR) that is designed to always stay at a fixed value, typically 1:1, with its fiat counterpart. For example, USDC is always intended to be worth $1. Stablecoins like USDC and EURC are issued by regulated companies (like Circle) that hold equivalent reserves of cash and short-term treasuries. These reserves are audited regularly to ensure every token in circulation is backed by a real-world asset. This peg mechanism is what keeps the value stable.
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