Fiat-Backed vs. Asset-Backed Digital Currencies

Fiat- and Commodity-Backed Stablecoins: Asset-Backed Digital Currencies Explore fiat- and commodity-backed stablecoins like USDC, PAXG, and gold tokens. Key takeaways • Stablecoins are used to store value, send remittances, make payments, and enable DeFi access. • Fiat-backed stablecoins are backed 1:1 by fiat currencies like the US dollar or euro. Fiat-backed stablecoins dominate in market cap, but commodity stablecoins offer alternative methods of maintaining stable value. • Commodity-backed stablecoins, or “commodity collateralized stablecoins,” are backed by physical assets like gold, silver, or oil. • Both fiat-backed and commodity-backed stablecoins are pegged to real-world assets, unlike BTC or ETH, which are…