Xaman Help Center
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  • Welcome to the Xaman Help Center!
  • Getting started with Xaman
    • 💙Understanding the Xaman Service Fee
    • 🎉Xaman 4.0
    • How to create a RLUSD Trust Line
    • 💸What is Xaman?
      • Understanding Self custody
      • Where are your funds stored?
      • Xaman & natural disasters
      • Common misconceptions
    • Installing Xaman
    • Your first XRP Ledger account
      • How to create an XRP Ledger account
    • Activating an account (XRPL)
      • From GateHub
      • From Uphold
      • From Kraken
      • From Crypto.Com
      • From Coinbase
      • From Kucoin
      • From Binance
      • From Bitrue
      • From Bitstamp
    • Importing your account (XRPL)
      • Should I import my XRP Ledger account into Xaman?
      • ...with Secret Numbers
      • ...with a Family Seed
      • ...with a Mnemonic
      • ...a Xaman card
      • ...in Read Only mode
      • How to import an XRP Ledger account from a hardware wallet
    • Buying XRP
      • Banxa
      • BTC Direct
      • Guardarian
      • Topper
      • C14
      • Xaman On/Off Ramp
    • Sending tokens to Xaman
    • Sending XRP to Xaman
    • Sending tokens from Xaman
    • Sending XRP to Moonpay
    • How to convert a Read only account to Full Access
    • Deposit to Exchange Didn’t Arrive
    • Can Xaman reverse, freeze or undo a transaction?
    • Can I view/export my account secret?
    • I've lost my account secret!
    • Accessing your XRP Ledger account
    • General Terms and definitions
    • How to create a Trust Line
    • How to test your Account Secret
    • How to Rekey an XRP Ledger (XRPL) Account
    • How to disable the Master key
    • How to enable the Master Key
    • How to configure biometrics
    • Displaying XRP value
    • How to migrate from Toast Wallet to Xaman
    • Why adding / generating & confirming "Secret Numbers" is not user friendly
  • Learning more about Xaman
    • 📱Got a new phone?
    • 🪙Supported tokens
    • Adding an Icon/Logo to a Trust Line in Xaman
    • Cashing out your XRP
    • Cashing out with GateHub
    • Adding Euro tokens via GateHub
    • Xaman & the Flare network
    • Xaman & AMM
    • Xaman & Fractal ID
    • Spam on the XRP Ledger
    • How to set the currency
    • How to change your Email Address
    • KYC
    • xApp Publishing
    • How to Get a Token Added to the Xaman Short List
    • Destination tags
    • How to recover a Casinocoin (CSC) account
    • GateHub’s issued tokens
    • How to send SGB to BiFrost
    • Taxes and your XRPL/Xahau accounts
    • How to reset the 6 digit passcode
    • Resetting the (account) signing password
    • Deleting an XRPL account
    • Official communication channels
    • NFTs
      • NFT Burn Process
    • Does Xaman offer Staking?
    • I've been scammed!
    • How to take a screenshot
    • Moving your XRPL account to another wallet
    • Feeling Generous?
    • How to access Testnet on XRP Ledger
  • Configuring Xaman
    • Understanding the Settings Options
      • How to take a screenshot
      • Events screen
      • Security screen
      • How to post a Session Log
      • Third party apps
  • XAMAN (TANGEM) CARDS
    • All about Xaman (Tangem) cards
    • Getting started with your new cards 🤗
    • How to configure a backup signing account
    • Creating a pin on your card
    • Best Security Practices Using the Xaman (Tangem) Cards
    • Lost or damaged cards
    • How safe is a card?
    • How to link an existing account to a Xaman card
  • ALL ABOUT XAPPS
    • Xaman xApps
      • Account Worth
      • Account Merge
      • Vanity Address xApp
      • Get Cards
      • DEX Trade
        • The price difference between selling and buying is too high
      • Path Finding
      • Xumm Pro Beta
      • Buy/Sell XRP
    • XRPL Services
      • Token Trasher
        • How to remove a Trust Line
        • How to get rid of tokens
      • Escrow creator
        • How to release an escrow
      • Token creator
      • Xahau Import
    • XRP Community
      • Trust in the XRPL Community
      • CasinoCoin Lobby
      • XRP Ledger TipBot
      • UniSpend
      • Transaction Exporter
      • Gatehub Trade
      • Stably xApp
    • Xahau xApps
      • Balance Adjustment
      • XAH Teleport
      • Voucher
  • Xaman Pro
    • 😎What is Xaman Pro?
    • How to subscribe to Xaman Pro
    • Features of Pro
      • Profiles
        • All about Profiles
        • What is PayString?
        • Setting up your Xaman Profile
      • Push notifications
      • Accounts
      • Xaman App early access
      • Free Tangem Card
      • Premium Support
      • Vanity addresses
  • Security and Xaman
    • All About Security
      • How secure is Xaman?
      • Has Xaman been audited?
      • Upgrading your encryption
      • Xaman (Tangem) Cards
      • 2FA and Xaman
      • Account present on another device
      • Quantum Attacks and Xaman
  • XRP Ledger resources
    • XRP Ledger Concepts
      • Video: Reserves and Fees on the XRPL
      • About Reserves
      • Payment Channels
      • Multi Signature
      • Understanding fiat currencies
  • Release notes
    • Current release
    • Previous releases
      • 😎Updating to Xaman v2.8.2!
      • Xaman v2.8
      • Xaman v2.6 (Formerly Xumm)
      • Xumm v2.5
      • 🥳Updating to Xumm v2.5!
      • Updating to Xumm v2.4
      • Xumm v2.4
      • Xumm v2.3.1
      • Xumm v2.3.0
      • Xumm v2.2.8
      • Xumm v2.2.6
      • Xumm v2.2.5
      • Xumm v2.2.3 / v2.2.4
      • Xumm v2.21
      • Xumm v2.0
      • Xumm v1.0.0
      • Xumm v0.6.0
      • Xumm v0.5.2
      • Xumm v0.5.1
  • About Xaman & XRPL Labs
    • About XRPL Labs
    • 👨‍👩‍👧‍👧The XRPL Labs/Xaman team
      • 📺Team: Ali, Satish & Koen
      • 📺Team: Richard & Tristan
      • 📺Team: Chris & Alex
      • 📺Team: Tom & Kevin
      • 📺Team: Dominique & Dirk Jan
      • 📺Team: Patrick & Will
      • 📺Team: Mai
      • 📺Team: Denis & Robert
    • Xaman vs. Ripple
    • Privacy Statement
    • Terms of Service
    • Responsible Disclosure Policy
    • Switching from Ledger to Xaman
  • Xahau
    • Activating a Xahau account
      • Activating an XRPL account on Xahau
      • Activating a Xumm card account on Xahau
      • Activating a Vanity Account on Xahau
      • How to send XAH from GateHub
      • How to send XAH from Bitrue
      • Via another Xahau account
    • Understanding the XAH token on the XRP Ledger
    • Understanding Reserves on Xahau
    • Understanding Trust Lines on Xahau
    • How to create a XAH Trust Line in your XRPL account
    • How to create a Trust Line (Xahau)
    • How to create an Evernode Trust Line
    • How to trade XAH coins
    • How to Rekey a Xahau account
    • How to trade Evernode (Evr) tokens
    • How to send XAH to GateHub
      • How to send XAH Tokens to GateHub - Hosted account
      • How to send XAH Tokens to GateHub - Self Custodial account
      • How to send XAH coins to GateHub - Hosted account
      • How to send XAH coins to Gatehub - Self Custodial account
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  • What is a fiat currency?
  • What is a stablecoin?
  • The role of Trust
  • Other considerations

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  1. XRP Ledger resources
  2. XRP Ledger Concepts

Understanding fiat currencies

What is fiat?

What is a fiat currency?

Fiat is a type of currency that is not backed by a commodity. Its value is derived from the trust that it will be accepted by merchants and other people as a means of payment for goods, services and liabilities. All major currencies are fiat currencies including Euros, USD and GBP. They were issued by various governments to be used as legal tender and are regulated by their respective governments.

What is a stablecoin?

A stablecoin is a type of cryptocurrency where the value of the token is pegged to a reference asset.

For example, the Bitstamp exchange has issued a EUR stablecoin on the XRP Ledger. Its value is equal to Euro fiat currency since Bitstamp will accept and redeem the stablecoin and exchange it for Euro fiat upon request.

Another example of a stablecoin would be the BTC to ETH tokens issue on the XRPL by the Gatehub exchange. Their values are pegged to BTC and ETH coins issued on their blockchains. Either coin can be redeemed at the Gatehub exchange for BTC/ETH issued on their networks or they can be convert into various fiat currencies.

The role of Trust

The value of a stablecoin (or any other token issued on the XRPL) is based on the trust of the issuer and the use case of the token.

For example, a company such as Gatehub is a government regulated financial business entity required to obtain and maintain licenses, legal compliance, auditing and business infrastructure in order to stay in business. They have a proven track record of trust and reliability. Any token issued by them needs to be weighed against the probability that it will be honored and redeemed by them in the future.

For a government issued currency, its value is based on how stable the issuing government is, how much currency is in circulation, how much currency is being created and the strength of their economies. (Among many other factors.) Unstable governments or poorly run governments can cause a fiat currency to collapse in value.

When deciding on which tokens to purchase, it is a good idea to investigate who issued them and see what information is publicly available. Companies who are transparent, have a good history and who are actively participating in the XRPL community is a good starting point.

Other considerations

One of the strengths of the XRP Ledger protocol is its efficiency as a payment network. Transferring value across the globe on a blockchain, that is fast, reliable, decentralized, inexpensive and is carbon neutral, is a valuable service. Stablecoins issued by trusted entities help enhance the value of the network as a whole. When considering how you want to participate in the XRPL ecosystem, please keep this in mind.

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Last updated 1 year ago

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