# Stablecoin

*Crypto & Digital Assets — Finicade finance glossary*

A stablecoin is a token designed to hold a fixed value, usually one dollar, backed by reserves, by crypto collateral, or by an algorithm. The backing is everything: fiat-backed coins are effectively unregulated money market funds, and their reserve disclosures matter more than any technology. Algorithmic designs have failed repeatedly, most spectacularly Terra's UST, which lost $40bn of value in days in 2022.

**Also known as:** USDT, USDC, algorithmic stablecoin

**Related terms:** [Cryptocurrency](https://finicade.com/glossary/cryptocurrency), [Central Bank Digital Currency (CBDC)](https://finicade.com/glossary/central-bank-digital-currency), [Money Market Fund](https://finicade.com/glossary/money-market-fund), [DeFi](https://finicade.com/glossary/defi), [Overcollateralization](https://finicade.com/glossary/overcollateralization)

Source: https://finicade.com/glossary/stablecoin