What comes into your mind when you hear the word Stablecoins? In simple terms, Stablecoins are cryptocurrencies that tend to be pegged to other cryptocurrencies, commodities, or fiat currencies.
In this article, we will mostly focus on the stablecoins that are tied to fiat currencies.
The fiat-backed stablecoins are the most popular type of Stablecoins and their value is tied to one or more currencies like say the US dollar or the European Euro.
Tracing back the invention of Stablecoins to 2014 when Tether Limited invented the USDT, this made us change our view on cryptocurrencies since it was pegged to the US dollar, and back then, many exchanges were finding it difficult to hold sovereign currencies.
The fact that Stablecoins have a hybrid character and are also blockchain-based makes them provide the benefits of both fiat currencies and cryptocurrencies. These coins are also amazing in that, they can connect to uncountable internet and blockchain ecosystems due to the feature that allows them to get integrated with old traditional banking technologies.
They are also famous due to their stable character that allows people to send money seamlessly without any international barriers, nor the high international bank money transfer charges. Furthermore, these coins have the power to help people or startups get capital acquisition due to their peer-to-peer feature which can link you up with international investors, enabling lenders and investors to send money directly to startups, with entrepreneurs maintaining confidence that the value of the coins sent to them remains.
Stablecoins are majorly driven by transparency and liquidity thus helping people streamline their payments even through automation.
To conclude, we should get ready to see Stablecoins disrupt the e-commerce operations, the payments industry, lending markets, and the rent and salary payment systems.
I would like to know your take on this.