These stablecoins are tokens backed directly by some type of fiat currency. For USD-based stablecoins, for example, this means that for every token minted (created) on the blockchain, there is $1 in USD somewhere being held by the company issuing the stablecoin. This is the most common type of stablecoin, and is how tokens such as USDT, USDC, BUSD, GUSD, TUSD and others maintain their peg to the US dollar.