Baskadia

With the development of blockchain technology and cryptocurrency, Stablecoins are becoming an attractive and potential new financial tool. 

In this article, we will delve into the exciting world of Stablecoins, learn about how they work, applications and the benefits of this cryptocurrency.

What is stablecoin?

Stablecoins are a type of cryptocurrency designed with the ability to retain value by being tied to an asset, fiat currency or another valuable asset. The goal of Stablecoins is to become a safe haven for investors against price fluctuations of other crypto assets.

🏆🏆 Please see more at: https://www.scoop.it/topic/azco

List of popular Stablecoin coins today

The Stablecoin market is growing with a series of different types of Stablecoins being launched. Below are some popular Stablecoins that are widely used on the market:

• Tether (USDT): Stablecoin is pegged to the US dollar (USD), with a ratio of 1 USDT equivalent to 1 USD. USDT is the most popular Stablecoin today, widely used in cryptocurrency transactions and exchanges.
  

• USD Coin (USDC): Stablecoin issued by Coinbase, also pegged to the US dollar, with a ratio of 1 USDC equivalent to 1 USD. USDC is also one of the commonly used Stablecoins on the market.
  

• Binance USD (BUSD): Stablecoin issued by the Binance exchange, pegged to the US dollar. BUSD is designed to support trading and payment activities on Binance's exchange.
  

Stablecoin operating mechanism

Stablecoins can be divided into two main categories: pegged and unpegged. Pegged stablecoins are cryptocurrencies that are backed by an underlying asset, such as USD or gold. Meanwhile, unpegged stablecoins maintain value through a cross-market trading mechanism to maintain price parity with the underlying asset.

Mounted Stablecoins usually have an organization, company or exchange in charge of mounting and managing the underlying asset. This ensures the transparency and trustworthiness of Stablecoin.

Pegging the underlying asset also helps ensure that the Stablecoin can be directly converted into the corresponding fiat currency or underlying asset, providing high liquidity and wider usability.

🏆🏆See details at: https://www.instapaper.com/p/Azcoin

Advantages and disadvantages of Stablecoins

Advantages

• Price stability when trading: Stablecoins help users avoid large fluctuations in price after trading, especially when the market declines. Users do not need to convert to fiat currency such as USD or VND.
  

• Helping investors "avoid the storm": When the cryptocurrency market declines, Stablecoins help investors preserve the value of their assets without having to exchange for fiat money.
  

Disadvantages

• Supply Manipulation: Some Stablecoins, such as Tether (USDT), have been met with suspicion of supply manipulation. This may affect the transparency and trustworthiness of this currency.
  

• Centralized rather than decentralized: Some Stablecoins tend to be more centralized, posing risks of operational failure and financial mismanagement.
  

Application of Stablecoins in the financial market

Stablecoins are gradually becoming an important financial tool in the cryptocurrency market and are also applied in many different fields such as:

International payments

Stablecoins help solve international payment problems such as inflation, price fluctuation risks and high remittance costs. Businesses and individuals can use Stablecoins to transfer money quickly and save on fees, while keeping the value of assets stable.

Payment in e-commerce

With the development of e-commerce, Stablecoins are also applied to pay for online purchases. With high liquidity and low costs, using Stablecoins in e-commerce is becoming an attractive option for merchants and consumers.

Securities and digital assets

Stablecoins can be used in trading securities and digital assets. Using cryptocurrency helps reduce paperwork and legal procedures, while also increasing transparency and minimizing risks.

Lending and borrowing

Many blockchain projects have integrated Stablecoins into their platforms to allow users to lend and borrow through cryptocurrency transactions. This increases flexibility and reduces barriers to borrowing money.

🏆🏆Explore more: https://glose.com/u/CoinAZ

Conclusion

Through this article, we hope you have had an overview of Stablecoins and realized the diversity and potential of this digital currency. The use of Stablecoins is gradually becoming a trend in the financial market and will certainly continue to grow in the future.