Stablecoins that are backed by assets such as money (ie. central bank reserves, banknotes or bank deposits), commodities (eg. gold), or other cryptocurrencies. Since stablecoins are not covered by deposit insurance and central banks do not act as lender of last resort for them, to have confidence in them they need to be fully backed. The type of asset and the legal rights of the holder are key to whether there is confidence in the stablecoin, although, ulltimately, simple confidence or belief is also a significant factor in whether they are stable or not. The profitability of the asset to the provider and their own funding model is a part of assessing the stablecoin.