Stablecoins are a category of decentralized currency that have a controlled value. Their price is pegged to physical assets or determined using algorithmic logic; so stablecoins aren't subject to the same volatility and speculation associated with the rest of the crypto market.
Stablecoins can be a part of your trading strategy, as an on/off ramp to exchanges, or to hold value outside of traditional banks. They are also used for quick and cheap cross border payments and for business transactions.
Fiat collateralized stablecoins are backed by a real world assets like USD or commodities like gold at a 1:1 ratio. This makes them very price stable, however no collateral is held on the blockchain so they are inherently more centralized.
USD Coin (USDC) is an ERC-20 token on the Ethereum blockchain that is backed to the US dollar at a ratio of 1:1.
Crypto collateralized stablecoins are backed with reserves of cryptocurrency like ETH. Because of the volatility of cryptocurrency, the ratio of collateral held must be much higher to account for fluctuations in the market. The crypto collateral is held on the blockchain so the system is entirely decentralized and transparent, however they can be less price stable than fiat backed coins.
Non-collateralized stablecoins may sound complicated, but they are based on the same principles that central banks use to control the price of fiat currency. The price of these stablecoins are determined by code in smart contracts that algorithmically mandate stability. Non-collateralized stablecoins are completely decentralized, but there is no chance for liquidation if the coin fails.
To buy stablecoins on Newton, you'll need to create or sign in to your account, fund your account with fiat currency and then trade for the coin of your choice. Happy trading!