A stablecoin is a cryptocurrency whose value is tied to a stable asset, typically a fiat currency such as the U.S. dollar or a commodity like gold. This pegging mechanism aims to minimize price volatility, making stablecoins useful for transactions, remittances, and as a store of value within the crypto ecosystem. They play a key role in decentralized finance (DeFi) and are widely used for trading, lending, and hedging against market fluctuations.