27 June, 2022
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5 Top Stablecoin in the cryptocurrency market

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What is a stablecoin?

Stablecoin is any crytopcurrency that could reliably hold value over time inorder to minimize volatility and maximize utility. You can think of stablecoin as crypto dollars—they’re designed to reduce volatility that is well known with other cryptocurrency.

Stablecoins offer some of the best attributes of cryptocurrency (seamless global transactions, security, and privacy) with the valuation stability of fiat currencies.

Stablecoins do this by fixing their value to an external factor, typically a fiat currency like the U.S. dollar, euro or any other currency.

Consequently, their valuations are less likely to shift dramatically from day to day. That stability can increase their utility for everyday use as money, because both buyers and merchants can be confident that the value of their transaction will remain relatively consistent over a long period of time.

Through Stablecoin a Bitcoin investor can quickly convert his/her Bitcoin profits to a dollar-like value and then invest that elsewhere or simply withdraw that amount to a local bank account.

 

5 Top Stablecoin in the cryptocurrency market

 

1. Tether (USDT)

Tether was launched in 2014 and is the largest stablecoin as at the time of writing this article, one Tehter was pegged to be equals to one USA dollar. The most recent report shows just about ten percent is held in cash or deposit form. Almost half of Tether’s reserves consisted of ‘commercial paper’ — short term debt issued by companies to raise funds — that sounds risky, but the rating is claimed to be relatively safe and classified as a ‘cash equivalent’.

 

2. USD Coin (USDC)

USDC was launched in the year 2018 and its supply is limited by its dollar reserves. This USD Coin is accepted by most large exchanges and its usage is increasing in the decentralized finance (DeFi), DApps and gaming.

 

3. Binance USD (BUSD)

BUSD was launched in 2019, with supply limited by dollar reserves that are audited monthly. One of the largest crypto exchanges, Binance, is a founding member.

 

4. Dai (DAI)

Dai token is supply limited by the collateral stored in its vaults. However, that collateral is not US dollars but other cryptocurrencies, which led to a balancing act in early 2019.

 

5. TerraUSD (UST)

TerraUSD stablecoin was launched in 2020, with an interesting way to maintain its peg of one UST per USA dollar.

 

 

Disclaimer
Cryptocurrency information provided on this Site is for educational purposes only and is not intended to constitute investment or other advice on any financial assets.

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