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Fiat Backed Stablecoin
A fiat backed stablecoin is a stablecoin designed to maintain its value using reserves linked to a national currency. For a U.S. dollar stablecoin, those reserves may include cash and other eligible financial assets, depending on the product and regulatory framework.
Why it matters to you
The stability of a fiat backed stablecoin depends heavily on the quality, availability and management of the assets supporting it. Investors should understand what is held in reserve, where those assets are held, how they are verified and whether eligible holders can redeem tokens for fiat currency.
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