Give an Example of a Fully Collateralized Stablecoin.
USD Coin (USDC) is a prime example of a fully collateralized, fiat-backed stablecoin. Each USDC token is intended to be backed 1:1 by a dollar or dollar-equivalent asset (like short-term US Treasury bonds) held in reserve accounts.
This direct, full backing is what defines it as fully collateralized.
Glossar
Stablecoin
Instrument ⎊ Stablecoin refers to a class of cryptocurrency designed to maintain a stable market value, typically pegged to a fiat currency, which is essential for collateralizing margin accounts and settling cash-settled options in the derivatives market.
Fully Collateralized
Guarantee ⎊ Fully collateralized structures within cryptocurrency derivatives represent a risk mitigation strategy where the total value of assets backing a position exceeds its nominal value, effectively eliminating counterparty credit risk.
USDC
Structure ⎊ USDC is a regulated, fiat-collateralized stablecoin, designed to maintain a stable value pegged to the US Dollar on a one-to-one basis.