Stablecoins, unlike other cryptocurrencies, offer much-needed stability in the volatile crypto market by pegging their value to stable assets such as the US dollar. These digital tokens can be categorized into centralized and decentralized types, with the former often backed by fiat reserves held in bank accounts, while the latter offers more transparency and flexibility by allowing on-chain audits of collateral rates. Central Bank Digital Currencies (CBDCs) are a type of stablecoin issued by central banks and used for both retail and wholesale payments. Stablecoins maintain their stability through mechanisms like collateralized debt positions, arbitrage, and elastic supply strategies. Chainlink, a blockchain oracle, plays a crucial role in providing real-time, tamper-proof price feeds and collateral rate data, enhancing the security and reliability of stablecoin systems within decentralized finance (DeFi) applications. This integration ensures that stablecoins maintain a 1:1 value ratio with their pegged assets, thereby increasing transparency and trust for users.