What are Stablecoins?
Stablecoins are digital currencies that are linked to a “stable” reserve asset, such as the US dollar or gold. Stablecoins are intended to reduce volatility in comparison to unpegged cryptocurrencies such as Bitcoin.
What are some benefits of stablecoin?
- Stablecoins are open, global and accessible to anyone on the internet, 24/7.
- Acceptable (or easier) bridge from fiat to cryptocurrency.
- Transfer money across borders quickly and easily without any middleman or worries about operation times in each timezone.
Example of Stablecoins?
USDT
Tether or USDT is a type of blockchain-based cryptocurrency backed by the US dollar. For every USDT, Tether saves a US dollar in a savings account, so investors that hold Tether (USDT) can always change it back to USD. As of OCT 2022, USDT has a $68 billion market cap. The only two cryptocurrencies with a higher market cap are Bitcoin and Ethereum.
USDC
USDC was launched in 2018 by Coinbase and Circle Internet Financial, two well known digital asset exchanges. USDC is an ERC-20 token built on the Ethereum blockchain and is backed by the US Dollar one-to-one. Every USDC traded on the market represents a dollar saved in an audited bank account. As of OCT 2022, the market cap is $44 billion.
What can you do with stablecoins?
Minimize volatility
The value of cryptocurrencies like Bitcoin and Ether fluctuates a lot, sometimes by the minute. An asset that’s pegged to a more stable currency can give buyers and sellers certainty that the value of their tokens won’t rise or crash unpredictably in the near future.
Trade or save assets
You don’t need a bank account to hold stablecoins, and they’re easy to transfer. Stablecoins’ value can be sent easily around the globe, including to places where the U.S. dollar may be hard to obtain or where the local currency is unstable.
Transfer money cheaply
People have sent as much as a million dollars worth of USDC with transfer fees of less than a dollar.
Send internationally
Fast processing and low transaction fees make stablecoins like USDC a good choice for sending money anywhere in the world.
Summary
Because their prices are pegged to a reserve asset such as the US dollar or gold, stablecoins bridge the worlds of cryptocurrency and everyday fiat currency. Exchange your stablecoins with The Cryptoverse if you’re ready to dive into the world of Cryptocurrency.
