High volatility and lack of certainty inherent to digital currencies often discredit their ability to function as a medium of exchange. A digital asset cannot effectively serve as a store of value or a means of payment if its exchange rate is prone to unpredictable, violent swings.
Stablecoins are supposed to solve these issues by making cryptocurrencies less volatile and more secure. To achieve this stability, the coin is often pegged to one of the traditional assets like fiat currency, gold and such.