Stablecoin Will Be the Main Stream of World Finance
What is Stablecoin?
Stablecoin is a type of cryptocurrency that has a value, is almost unchanged and will not be affected by market volatility, because Stablecoin was created peged with gold or fiat money like USD, Euro etc.
Why are stablecoins important?
Because stable coins will be very useful for swaps quickly between cryptocurrency and stable assets, such as USDT, USDC, PAX, DAI, etc. For example, if a Bitcoin holder estimates that the price of BTC will fall then he can immediately exchange BTC with Stablecoin to keep losses. Because there are some exchanges that do not provide fiat money but provide Stablecoin.
Stablecoin is said to have the opportunity to become the main stream of world finance, thanks to the superiority of the blockchain technology pioneered by Bitcoin in 2008.
Satoshi menyebutnya sebagai Sistem Uang Tunai Elektronik Peer-to-Peer. Sebutan sistem itu pun disederhanakan oleh Hal Finney menjadi “block-chain” atau “blockchain”. Namun, hingga 11 tahun kemudian masih sedikit yang mampu menjelaskan blockchain dengan tepat.
Bitcoin as a new form of electronic money is not meant to be "stable" like the US dollar or Yen and other money issued by the state (fiat). Because, Bitcoin is the antithesis / opponent / opposite the ordinary money concept.
No wonder the price of Bitcoin is very volatile, because it is in a free market space, without any state control and central control in it. That's what explains that most people are not ready or may never be able to apply Bitcoin or other crypto assets in everyday transactions (at least as wide as the use of US dollars), let alone to pay employee salaries.
Based on blockchain technology, currencies issued by the state (fiat money) can be represented digitally. We commonly call it tokenization.
This is where the concept of stablecoin was born, such as the United States Dollar Tether (USDT), which is worth one unit as the value of one unit of real US dollars: one to one.
The combination of blockchain and fiat money, is now actually changing the way the world's finances work: from expensive to very cheap, from 3 days of cross-country shipments to a fraction of a second and a number of other advantages compared to banking services or PayPal.
China developed its fiat currency, namely the yuan, so that it was purely digital. Here we are introduced to a new concept, namely Central Bank Digital Money aka CBDC (Central Bank Digital Currency).
European Central Bank President Christine Lagarde said there was high demand for stablecoin on the market, and the governments of the European Union countries must be prepared. When Christine was still in charge of the IMF, she revealed the same thing, so that central banks in all countries utilize blockchain technology or sometimes she often referred to as DLT (Decentralized Ledger Technology).
Crypto currency activists are optimistic about the ability of the blockchain to revolutionize the financial future. Nevertheless, there are a number of shortcomings that turned out to be very impactful so as to make crypto adoption slow, such as regulation and theft in the crypto asset exchange.
Top 5 Stablecoins of 2020
However, the position of stablecoin directly depends on the situation with the asset that supports it. For example, if the dollar rises in price, the value of the coin tied to it will increase. If it goes down, then it will also drag the digital analog down.
With a market cap of $4,662,679,737 USD or 512,695 BTC, Tether is not only the largest and most well-known stablecoin, It is pegged against the US dollar and maintains a 1:1 ratio in terms of value.
USD Coin founded 2018 and created by Coinbase exchange and Circle company. Pegged toUS Dollar in a 1:1 ratio and is available on all the major crypto exchanges. Market cap: $437 960 448.
Founded: 2018 and Launched by the Paxos Trust Company backed by the US dollar in a 1:1 ratio. Market Cap $189,022,595 USD or 20,818 BTC. Circulating Supply 188,531,175 PAX
Founded 2018 Pegged to US Dollar, 100% is secured by US dollars. Today, TUSD ERC-20 token is the best stablecoin on Binance. Market Cap $137,764,349 USD 15,155 BTC. Circulating Supply 137,359,276 TUSD
Dai is backed by Ethereum-based smart contracts with redundancy. Founded: 2017 Pegged to US Dollar Market Cap $21,566,621 USD 2,374 BTC. Circulating Supply 21,444,688 DAI
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