The name Stable coin suggests that it could be a special coin used to pay for looking after your horse. It is not that.

I started buying and selling crypto in 2017. At the time I had heard of Bitcoin and Ethereum. I was then fascinated to discover that there were a multitude of other coins, each of which had its own use.

I bought small amounts of several different coins and came across Tether (USDT). As the name suggests, its value was pegged to the US $. I could easily buy and sell US $ and couldn’t see the point of having a cryptocurrency that was always worth 1$.

When trading between crypto currencies, however, I soon realised that exchanges always provide trading pairs that include stable coins.

The added complication comes when you find that there a multitude of different stable coins, each of which are issued by different people and usually for a specific platform. The value of each stablecoin is kept at or around 1 US$ by depositing fiat cash (or equivalent) with financial institutions. Further complications are brought in through the creation of DEFI stable coins that are backed up by crypto currencies rather than fiat.

It is getting ever more complicated, especially when you realise that you can trade stablecoins against each other, taking advantage of small variations in their value.

Briefly, any coin in the list that remains at around US$ 1 over time is probably a stablecoin, useful for trading or transferring value around the world.