0:58
beginner
June 13, 2022
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what is a stablecoin?

Cryptocurrencies are highly volatile, meaning that their value could change exponentially in just a short period of time. Therefore, it is not as easy to purchase using volatile currencies as it might result in huge losses.

Stablecoins offer the solution to this by pegging their value to fiat currencies. Because their prices are fixed to a reserve asset like the US dollar or gold, stablecoins serve as a link between cryptocurrency and daily fiat currency. Compared to Bitcoin (BTC), this significantly minimises volatility, resulting in a kind of digital money better suited to everything from everyday business to cross-exchange transactions. Stablecoins like USD Coin (USDC) have attracted billions of dollars in worth as they have become one of the most popular ways to store and transfer value in the crypto ecosystem.

The purposes of stablecoins are to provide crypto that could maintain stability while sustaining the advantages of blockchain technology. Cryptocurrencies like BTC and Ethereum (ETH) have much volatility, sometimes even by the minute. Buyers and sellers can have confidence that the value of their tokens will neither grow nor fall unpredictably in the near future if the asset is linked to a more stable currency. Stablecoins do not require a bank account to hold, and they are simple to move. Stablecoins can be easily transmitted worldwide, particularly to regions where the US dollar is difficult to come by or where the local currency is volatile.

*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.

*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.

what is a stablecoin?

Cryptocurrencies are highly volatile, meaning that their value could change exponentially in just a short period of time. Therefore, it is not as easy to purchase using volatile currencies as it might result in huge losses.

Stablecoins offer the solution to this by pegging their value to fiat currencies. Because their prices are fixed to a reserve asset like the US dollar or gold, stablecoins serve as a link between cryptocurrency and daily fiat currency. Compared to Bitcoin (BTC), this significantly minimises volatility, resulting in a kind of digital money better suited to everything from everyday business to cross-exchange transactions. Stablecoins like USD Coin (USDC) have attracted billions of dollars in worth as they have become one of the most popular ways to store and transfer value in the crypto ecosystem.

The purposes of stablecoins are to provide crypto that could maintain stability while sustaining the advantages of blockchain technology. Cryptocurrencies like BTC and Ethereum (ETH) have much volatility, sometimes even by the minute. Buyers and sellers can have confidence that the value of their tokens will neither grow nor fall unpredictably in the near future if the asset is linked to a more stable currency. Stablecoins do not require a bank account to hold, and they are simple to move. Stablecoins can be easily transmitted worldwide, particularly to regions where the US dollar is difficult to come by or where the local currency is volatile.

*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.

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