Stablecoins are less prone to price fluctuations because:

Stablecoins are less prone to price fluctuations because:
A . They do not use blockchain technology
B . Their price is in US Dollars
C . Their value is pegged to underlying assets
D . They are highly illiquid

View Answer

Answer: C

Explanation:

Stablecoin Characteristics:

Stablecoins reduce price volatility by pegging their value to stable underlying assets like fiat currencies (e.g., USD) or commodities (e.g., gold).

This backing creates confidence in their value stability.

Elimination of Other Options:

A: Stablecoins use blockchain technology.

B: Pegging can occur in other currencies, not just USD.

D: Stablecoins are designed for liquidity, contrary to being illiquid.

Reference: ICWIM Module 6: Explanation of cryptocurrency types and characteristics.