A stablecoin is a cryptocurrency whose value is tied to fiat / digital money or physical products. Unlike conventional digital coins, such assets are characterized by low volatility in the market and keep their price in the face of strong fluctuations in other cryptocurrencies.
TOP best stablecoins
For a better understanding, here is a list of stable coins. TOP-5 includes:
- TrueUSD – virtual money backed by the US dollar. Market capitalization at the beginning of 2021 is 20.3 billion rubles. TUSD was first launched in 2018. The purpose of the creation was to increase liquidity and provide traders with a low volatility cryptocurrency. The founders are TrustToken, which has been trying to prove its importance and safety since the launch of the project.
- USDT – Tether stablecoin, which is also pegged to the US dollar. It was first launched in 2014. It is used as a hedging instrument that protects against market volatility.
- USD Coin (USDC) is another coin pegged to the US dollar and is issued by regulated financial institutions. It was originally released in 2018 in a limited edition. It is used to protect against market volatility and allows companies to accept payments in the form of digital money. The goal of the developers is for the USDC to be accepted by as many exchanges, wallets and service providers as possible in the future.
- Binance USD (BUSD) is a stablecoin issued by the Binance exchange in partnership with Paxos. Stablecoin is approved and regulated by NYDFS. It is used for trading on stock exchanges, as collateral for futures, for collateral and loans, to pay for services / goods.
- Paxos Standart is a stablecoin that allows you to exchange dollars for digital money to speed up transactions.
There are other digital coins that are tied to popular assets. This category includes DAI, BitUSD, STASIS and others.
Pros and cons
The purpose of producing stablecoins is to simplify cryptocurrencies and develop confidence in them from regular users and organizations. Now numerous are frightened off by the high volatility and unpredictability of digital money, but the emergence of stablecoins neutralizes the risks and allows you to look at this market from a distinctive perspective.
- Least volatility to preserve capital in the event of strong market fluctuations.
- Backing with real assets: precious metals, oil, fiat money, etc. This feature gives confidence in the cryptocurrency and its stability.
- Increasing popularity of digital coins, including for use in the familiar sector.
- Minimal dependence on government agencies.
- Retention of value over a long period of time.
- Lack of support on all exchanges.
- Issued by stock exchanges or companies that decide on the number of stablecoins in circulation.
- The presence of rules that restrict operations with cryptocurrency in banking institutions.
- A negative story, for example, with Tether, has a bad effect on the level of trust and exchange rate.
- The risk of robbery of a banking institution where the money that underpins the virtual currency is stored.
Where can you buy stable blocks?
In conclusion, we note that you can buy stablecoins on many exchanges – Binance, OKEx, Huobi Global and others. To complete a transaction, you must register and provide personal data. In the future, it remains to choose digital money and the cryptocurrency that you plan to sell. If you wish, you can buy coins directly (without an exchange), but in this case, there is a high risk of falling for scammers and being left without funds at all.