Unlike other cryptocurrencies, Stablecoins are meant to provide financial stability in the face of price fluctuations in the volatile cryptocurrency market. There are different kinds of stablecoins, such as FIAT-pegged stablecoins (e.g. pegged to the U.S. dollar or the euro), commodity-backed stablecoins (e.g. gold), crypto-backed stablecoins and stablecoins which rely on an algorithmic mechanism to keep them pegged.
For instance, a dollar-pegged Stablecoin is redeemable 1:1 against the U.S. dollar. Prominent examples of dollar-pegged Stablecoins are Tether (USDT), USD Coin (USDC) or Binance USD (BUSD).