Stablecoins are a category of cryptocurrencies designed to maintain a stable value relative to a reference asset, such as a fiat currency (like the U.S. dollar) or a commodity (like gold). They achieve this price stability through various mechanisms, including holding reserves, using algorithms, or collateralizing other digital assets. Stablecoins are commonly used to reduce volatility in cryptocurrency markets, facilitate trading, and enable efficient transfers of value on blockchain networks.