1. What exactly is a stablecoin?

a. Origin: Born from the early crypto industry's need for stable pricing tools, it solved the trading challenges caused by the high volatility of assets like Bitcoin.

b. Definition: It is a cryptocurrency pegged to the value of fiat currency, with its core advantage being deep integration with blockchain projects like DeFi. As traditional financial institutions venture into the RWA sector, stablecoins have made breakthrough progress in payments and market applications. They not only serve as pricing tools in the crypto market but are also gradually replacing the payment functions of traditional fiat currencies.

c. Scope: Stablecoins themselves are a form of RWA (Real World Asset tokenization). Their uniqueness lies in being pegged to a special asset—real-world fiat currency.

For example, the EU's MiCA regulation distinguishes two types of stablecoins: one pegged to a single asset (e.g., the euro) and another pegged to multiple assets (e.g., the euro and gold). Other RWA types include bonds, real estate, securitized corporate assets (STO), and even charging stations.

d. Essence: Stablecoins are on-chain fiat tools, mapping the value of real-world assets onto blockchain networks. As a typical RWA (tokenized real-world asset), they can interact peer-to-peer with crypto assets like Bitcoin, whereas traditional fiat currencies lack blockchain scalability due to their inability to be on-chain.

$Circle(CRCL.US) $Robinhood(HOOD.US) $Coinbase(COIN.US) $Digital currency concept(CP00079.US)