Stablecoins, a type of cryptocurrency designed to maintain a stable value by pegging to another asset, face implementation challenges, especially algorithmic stablecoins. Chainlink's Proof of Reserve (PoR) can enhance the stability and transparency of stablecoin protocols by providing real-time reserve audits and boosting market confidence. Stablecoins aim for stability by pegging to assets like the US dollar, using collateralization methods or algorithmic controls to maintain their peg. Different types of stablecoins include fiat-collateralized, crypto-collateralized, and algorithmic, each with varying levels of decentralization and mechanisms to ensure value stability. Concerns about the existence and value of collateral backing stablecoins highlight the need for reliable data and transparency. Chainlink addresses these issues by connecting blockchain to external data through decentralized oracles, enabling automated and secure auditing of reserves. Utilizing Chainlink PoR and Price Feeds, stablecoin protocols can achieve higher transparency and security, ensuring reserves back the circulating supply effectively. This technology also supports emerging Central Bank Digital Currencies (CBDCs) by providing accurate reserve data and safeguarding against systemic risks, thereby reinforcing the critical role of stablecoins in the DeFi ecosystem.