Explained: What are Stablecoins — The Holy Grail of FintechThe idea of a price stable cryptocurrency has been doing the rounds for quite some time. The stablecoin definition lies in its working.Even while we are waiting for the industry to come with its own version of ideal stablecoin, what cannot be ignored is their benefits. Going by the concept and the working use cases of stablecoins (the list is shared later in the article), they have what it takes to be the bridge that fills the gap between digital and fiat currency.But prior to knowing how are stablecoins used, it is necessary to know their importance.These benefits of stablecoins are what majorly makes up for the answer to what are stablecoins:Importance of StablecoinsRise in blockchain development company, owing to the alignment between fiat and digital world.Bigger access to global financial system: everyone using the internet will be able to get stablecoins.The intersection of tokenized securities and stablecoins will make dividends and investments practical.Greater programmability would happen since the stablecoin payments would not be subject to cryptocurrencies’ volatility.List of Stablecoins213 stablecoin projects are estimated to have come into existence ever since the launch of the term back in 2014, with the current stablecoin market cap being USD 3,197.89. While not all of them saw the morning sun, the number of stablecoins operating and in the plan is not less.With brands like Walmart and Facebook entering the stablecoin game, the market is poised to be on a steep rise. And so would be the increase in confusion of which stablecoin is the best.TetherDAIUSD CoinGemini DollarTrue USDPaxos Standard TokenBitspark has done an amazing job of explaining the features set of each of the stablecoin and the blockchain that supports them. But, you should take the list with a grain of salt, simply because the market is on a growth spur. Meaning, there is no guarantee that the names which are in the list today will be here tomorrow.At this note, it will be worth mentioning who all are issuing the stablecoins, now or in the time to come.A. JP Morgan: After calling bitcoin a “fraud,” the US Bank unveiled its plan to launch its stablecoin. The plan behind this cryptocurrency is to speed up the settlement time in case of international transactions.B. IBM has launched its blockchain-powered World Wire in collaboration with Stellar, with the aim of developing cross-border payments network. Here, international banks would be able to develop their stablecoins backed by the local fiat currency.C. Facebook hired dozens of engineers to create its fiat-pegged stablecoin, Libra, which users could use to send money to their family and friends across borders, from within their apps.ConclusionThe purpose of stablecoins is a lot bigger than enabling financial contracts or being a transparent & semi-stable way for traders to trade. It is the evolution of money.It is the new money that will be controlled algorithmically, in the absence of any political stimulus. It would simply serve the use of being an advanced medium of transaction and as a unit of account that we have in human history.And so it is imperative that we prepare for the limitations of stablecoins and get it right.Standing on the same parallel grounds as the idea of John Nash’s ideal money, stablecoin has what it takes to become a global money standard — one that is similar to the standard measure, like the metric system. It has given us a way to develop a decentralized currency which promotes price stability.Originally published on: https://appinventiv.com/blog/stablecoins-explained/The Capitalhttps://medium.com/media/3b6b127891c5c8711ad105e61d6cc81f/hrefExplained: What are Stablecoins — The Holy Grail of Fintech was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
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