A Breakdown on Stablecoins

Stablecoins are blockchain-based tokens designed to maintain a stable value - usually pegged to the U.S. dollar. They offer a reliable alternative to volatile cryptocurrencies and are increasingly embraced by major financial institutions like PayPal, Visa, and Mastercard. Stability is achieved by overcollateralizing - backing by excess crypto collateral, fully collateralizing - backing 1:1 by fiat reserves, using algorithms - using code-based supply/demand balancing and commodity-based backing - pegging an exchange rate to physical assets like gold.

Why Stablecoins Matter?

Cross-Border Payments: Enable fast, low-cost international transfers
Trading & Transfers: Offer quick asset movement for crypto traders
DeFi Infrastructure: Serve as the backbone for lending and borrowing protocols

Arbitrum One is highlighted as a major Layer 2 hub for stablecoins, hosting key players like PYUSD and BlackRock’s BUIDL.

Why It Matters?

Businesses can build DeFi apps using Arbitrum’s Rollup or AnyTrust tech, integrating stablecoins for lending, payments and other trading needs. Key application usecase is remittance platforms using stablecoins offering cheaper, faster international payments - especially in high-volume regions.