Collateralized stablecoin companies are expected to actually hold the assets against which their coin is pegged (e.g., US dollar or gold). So they issue new units based on the value of their holdings. This model is the basis of most stablecoins. Prominent examples include USD Coin (USDC), Paxos (PAX), and TrueUSD (TUSD), where each token is backed on a 1:1 ratio by money held in the bank accounts. So these companies only issue new stablecoin units when they receive the equivalent value in fiat currency.
Some stablecoins are pegged to other cryptocurrencies instead of fiat or commodities, and these are often referred to as crypto-collateralized stablecoins. The peg of these coins is maintained through over-collateralization and stability mechanisms. A prominent example is DAI, the stablecoin minted in the Maker DAO ecosystem.
Non-collateralized stablecoins, on the other hand, make use of algorithms to control the supply of tokens in order to keep the price fixed at a predetermined level. The goal of these coins is to maintain a stable value by algorithmically expanding and contracting its circulating supply in response to market behavior.
Sorce link:-
https://www.google.com/amp/s/academy.binance.com/en/glossary/stablecoin%3famp=1