Stablecoins are a type of cryptocurrencies that aim to maintain stability by being pegged to a basic asset such as the US dollar. They reduce price volatility while being able to be traded quickly with other cryptocurrencies. Fiat currencies (such as USD, GBP, EUR, etc.) are financial assets with lower volatility compared to cryptocurrencies. Due to the high volatility of cryptocurrencies, stablecoins play a balancing role compared to other assets.