Stablecoins, on the other hand, are less susceptible to price changes. Stablecoins are digital currencies that are backed by a physical object, usually a fiat currency. However, they retain much of the appeal of other cryptocurrencies, providing investors with access to a new and fast-evolving asset class. A stablecoin is a cryptocurrency whose price is stable—as in constant or fixed—and whose value is connected to a safe asset such as fiat cash, as the name suggests. Not all stablecoins are made equal. With the growing number of stablecoins available, it’s crucial to know which ones are the most useful and secure. Right present, the best stablecoins are:

Tether (USDT): $1.00

Tether is referred to as a stablecoin since it was designed to always be worth $1.00, with $1.00 in reserves for each tether released. Tether Limited, on the other hand, says that tether holders have no contractual rights, no other legal claims, and no assurance that their tethers would be redeemed or exchanged for dollars. Many traders utilize Ethereum alongside the asset because it is effectively a decentralized dollar. Customers can keep track of their money with Tether because they can convert it to other assets without first going through Bitcoin.

True USD (TUSD): $0.9998

True USD (also known as “TrueUSD”) is a US dollar-backed stablecoin that is one of the most liquid on the market.

Compared to fiat currency wire transfers, Bitcoin has lower transaction fees and higher interest rates on held amounts.

When TrustToken’s chosen partner banks are paid, TrueUSD units are created. On a regular basis, Cohen & Co., a U.S.-licensed accounting firm, attests to the adequacy of the deposits. TrueUSDs are deposited in escrow to provide the TrueUSD holder with a legally clear claim on the dollar deposits.

Paxos Standard (PAX): $0.9998

Paxos Standard aims to keep its exchange rate with the US dollar at 1:1. 

It was created in response to the Tether printing episode, in which Tether was admonished for claiming to have $1.8 billion in the Deltec Bank & Trust Ltd bank account to back its stablecoin. Tether’s side project, PAX (Paxos Standard Token), was launched as a side project. The United States dollar, which is held in government-controlled treasuries, also backs the asset.

USD Coin

USD Coin (USDC) is a dollar-pegged stablecoin created by the Centre Consortium, a collaboration between Circle and Coinbase. It was first announced by Circle on September 26, 2018. Centre, a membership-based consortium that specifies technical, policy, and financial parameters for stablecoins, is in charge of USDC. USDC is issued by regulated financial institutions and is redeemable for US dollars 1:1. It is backed by entirely reserved assets and issued by regulated financial institutions. Hundreds of businesses, products, and services, including digital wallets, exchanges, Defi protocols, savings, loans, and payment systems, support the USDC standard. USDC adds value to the entire blockchain ecosystem.

Binance USD (BUSD): $0.9999

Not to be outdone, Binance has developed a Binance USD that is pegged to the US currency 1:1. These are digitized US dollars that are always bought and traded at the rate of 1 BUSD to 1 USD. Buying or selling Binance USD (BUSD) is free on Binance and Paxos, though bank and wire fees may apply. Transfer your money anywhere in minutes for a low fee and on the blockchain with support for ERC-20 and BEP-2.

Goldcoin

Goldcoin is an Ethereum-based stablecoin that is backed by gold. You can use cryptocurrencies to acquire and maintain the asset. With Goldcoin, you can now get actual bullion delivered to your door. However, this requires you to reveal your identity, which may put off some investors. Otherwise, you can buy gold anonymously with this stablecoin.

Conclusion

Stablecoins aspires to connect the digital asset and fiat currency worlds by allowing users and investors to have their cake and eat it too: lower volatility mixed with the benefits of blockchain technology and cryptocurrencies’ decentralized, secure, transparent, and quasi-anonymous payment system.

 

 

BuyUcoin Blog | By Anubha Singh