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Anchor of Stability: How Are Government Stablecoins Secured? The key difference between a government stablecoin and other digital assets is the backing mechanism. The reliability of the token, like similar assets, is based on a simple principle: each issued token is backed by real fiat currency (KGS) in reserves 1:1. This guarantees price stability and protects users from volatility, combining blockchain innovation with the reliability of traditional money.