Stablecoin Terms to Know
Stablecoin Terms and Definitions
Understanding stablecoins is easier than you think. Simplify the education process with Blockfer's essential stablecoin terms and their definitions below.
AML
AML - ‘Anti Money Laundering’. A formation of laws created by regulators in order to prevent illegally sourced funds from being claimed as legitimate income.
Centralized Stablecoin
A stablecoin created and maintained by a third party company. While usually regulated and insured, users still must trust the stablecoin issuer to operate honestly.
Circulating Supply
The total number of accessible, liquid units issued for a specific stablecoin.
Collateral
The asset used to secure and back the value of the stablecoin.
Decentralized Stablecoin
A stablecoin that is governed and maintained by smart contracts. Users do not need to trust a third party company when using decentralized stablecoins.
Ethereum
The public, open-source, blockchain based distributing computing platform that supports the majority of stablecoins with smart contracts.
ERC-20
An Ethereum protocol standard used for smart contracts that enables tokens to be issued. Most stablecoins are ERC-20s using the Ethereum blockchain.
KYC
"Know Your Customer" - Financially regulated companies, including centralized stablecoin issuers, are required by law to verify the identity of their customers.
Pegged To
Fixed exchange rate. Stablecoins were designed to maintain a 1:1 peg to their underlying asset.
Redemption Fees
Commission fees charged to customers when they redeem their stablecoins for fiat through an issuance platform.
Stablecoin Cold Storage Wallet
A physical hardware wallet device used for storing and accessing stablecoins.
Stablecoin Market Cap
The combined dollar value of all issued stablecoin units for a specific stablecoin.
Stablecoin Volume
The exchange traded volume of a stablecoin within a period of measured time, usually 24 hours.
Stablecoin White Paper
A document outlining a company’s funding requirements, business model, and product roadmap.
More Stablecoin Resources:
- See the best interest rates on our stablecoin index.
- Use our hardware wallet purchase guide to keep your stablecoins safe.
- Compare stablecoins and find the right fit for your needs.
- Get detailed information with our comprehensive stablecoin reviews.