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This chapter introduces the concept of stablecoins such as Tether, DAI, or Ampleforth. It also provides a taxonomy of the different types of stablecoins consisting of (1) traditional asset-backed stablecoins, (2) crypto-collateralized stablecoins, and (3) algorithmic stablecoins and seigniorage shares. The chapter continues with a brief history of stablecoins, starting from BitShares as the first stablecoin implementation over tether and market-wide stablecoin adoption to Facebook-initiated Diem. Next, the chapter explains the impact of stablecoins on cryptocurrencies and other markets and discusses trends and challenges facing stablecoins. The chapter provides a basic understanding of stablecoins, their defining characteristics, challenges, and markets.

Bitcoin’s introduction as the first cryptoasset in 2009 ushered in a new era, representing a seismic shift in the financial markets. Since then, this evolving asset class has generated much interest, excitement, and growth. This chapter begins by providing a brief background of cryptoassets. It then discusses their main types (cryptocurrencies, security tokens, and utility tokens), users (individual investors, major financial institutions, endowments, and hedge funds), and benefits and drawbacks. Next, it sets forth the book’s purpose, distinguishing features, intended audience, and structure. The chapter provides a synopsis of each of the remaining 21 chapters. Although no single book can encompass all changes and iterations of these technologies as they emerge in the marketplace, this book brings together a broad collection of industry expertise and academic analysis to create a book helpful to researchers, academics, and practitioners.