International Stable Currency Whitepaper
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  • Introduction
    • 🌎What is ISC?
    • 👑Why ISC Matters
      • State of Fiat Currencies
      • State of Stablecoins
        • What is a Stablecoin?
        • Improvements on Fiat
        • Drawbacks of Existing Stablecoins
    • ⭐What Sets ISC Apart?
  • How ISC Works
    • 💰The ISC Reserves
      • Key Entities
      • Key Concepts
      • Basic Mechanics
      • Advanced Mechanics
      • Oversight
    • 📥DAO Model and International Governance Token ($INTL)
      • Community Oversight
      • Governance Mechanics
      • $INTL Tokenomics
      • Burning $INTL: Aligning the Economic Incentives of $ISC and $INTL
    • 🖥️Technological Foundation
    • ❗Disclaimer
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  1. Introduction
  2. Why ISC Matters
  3. State of Stablecoins

What is a Stablecoin?

Stablecoins are a type of cryptocurrency that pegs its value to another currency, commodity, or financial instrument. This makes them preferable as a medium of exchange compared to other cryptocurrencies, such as Bitcoin and Ethereum, whose value can be highly volatile and are therefore impractical to use as a currency. The most popular stablecoins are pegged to the US Dollar.

How are USD-Pegs Maintained?

All stablecoins that are pegged to the value of the US Dollar are set at a value of one US Dollar ($1.00). Despite this point of commonality, various methods are used to maintain this peg. The three most common methods are: fiat-collateralization, where the stablecoin is backed by a reserve of fiat currency and/or cash equivalents; crypto-collateralization, where the stablecoin is backed by a reserve of cryptocurrencies; and algorithmic, where a combination of dynamic collateralization, dynamic minting and burning, and overcollateralization are employed to maintain the peg.

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Last updated 1 year ago

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