Why Do Stablecoins Typically Have a Very Narrow Bid-Offer Spread?

Stablecoins are pegged to a stable asset, usually a fiat currency like the US dollar, which reduces price volatility significantly. Their primary function as a medium of exchange and store of value encourages high trading volume and deep liquidity.

This combination of low volatility and high liquidity ensures that the bid and offer prices remain extremely close, resulting in a minimal spread.