The popularity of stablecoins is increasingly on the rise. Recently, as Bitcoin hit new records, the market value of stablecoins witnessed a 10x increase. Facebook has announced its own stablecoin, and even VISA has become the first major payments network to settle transactions in the American dollar-backed stablecoin USDC.
So what’s to love about stablecoins? The main reason is, they lack the volatility of regular cryptocurrencies. As they’re pegged to a more consistent reserve of value such as fiat currency, diamonds or gold, the price of a stablecoin isn’t inclined to fluctuate so dramatically as say, Bitcoin or Ethereum does.
“You can have reasonable assurance that in 3 months time, or 6 months time, or 1 week’s time, it’ll still be worth $100. And that’s what was missing in crypto before stablecoins came along.” – Alex Kern, Intelligence Analyst, CB Insights
This consistency has created trust in these types of tokens, which have been around since 2014. But before