Stablecoins: What is their importance in the cryptocurrency world
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In the vast cryptocurrency world, where volatility is something more than normal, stablecoins represent a unique class of assets. They provide stability, which is not something characteristic of traditional cryptocurrencies such as Bitcoin and Ethereum. But what are stablecoins? Why are they so important?
What are stablecoins?
Stablecoins are a type of cryptocurrency directly linked to a stable asset such as the USD or gold. This means that their price is not subject to the fluctuations of other cryptocurrencies. The most well-known stablecoins include Tether (USDT), USD Coin (USDC), Binance USD (BUSD), and Edelcoin.
Edelcoin: Unique stablecoin secured by the wealth of the Earth
Let's start with the fact that Edelcoin is a unique stablecoin which is fully secured by a wide portfolio of precious and base metals. This stablecoin offers a number of advantages that make it an excellent addition to the stablecoin ecosystem.
Edelcoin provides security at all levels, From mining and storage to release and trading. It is fully secured with pre-existing precious and base metals, which ensure its stability. Edelcoin also offers opportunities for portfolio diversification and inflation protection. In addition, Edelcoin will offer additional services for generating revenue and trading tokens on a special tokenized goods market.
Why are stablecoins so important?
Stability: As mentioned, stablecoins provide stability in the volatile world of cryptocurrencies. Such an approach makes them a perfect choice for those who want to avoid the risk of volatility but, at the same time, want to get the benefits of using cryptocurrencies, such as fast and cheap transactions.
A bridge between fiat money and cryptocurrencies: Stablecoins serve as a kind of bridge between traditional fiat currencies and cryptocurrencies, thus facilitating their exchange.
Accessibility: Access to banking services may be limited in many countries worldwide, especially in developing ones. Stablecoins can offer a solution by allowing people to store and transfer money without having a bank account.
Stablecoin stats
As of July 2023, according to CoinMarketCap, the total capitalization of the stablecoin market is more than $130 billion, which is about 5% of the total capitalization of the cryptocurrency market. Tether (USDT) is the largest stablecoin with more than $60 billion market capitalization.
As of June 20, 2020, according to Statista, there were 74 different stablecoins, and only three had a market capitalization of more than 10 billion US dollars. These are Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).
Stablecoin use-cases
Stablecoins play an important role in the world of decentralized finance (DeFi). They are used to ensure stability in smart contracts, which can be subject to significant price fluctuations due to the volatility of the main cryptocurrencies.
Conclusion
In wrapping up, stablecoins, including Edelcoin, play an important role in the cryptocurrency ecosystem, providing stability and creating a bridge between traditional fiat currencies and cryptocurrencies. They continue to gain popularity and are likely to play an even greater role in the future of cryptocurrencies and blockchain.
Test your knowledge
- What are stablecoins?
a. Cryptocurrencies with the most fluctuating price in the market.
b. Cryptocurrencies with their price directly related to a stable asset, such as the USD or metals.
c. Cryptocurrencies that can only be exchanged for other cryptocurrencies. - Which stablecoin is secured with a wide portfolio of precious and base metals?
a. Tether (USDT)
b. USD Coin (USDC)
c. Edelcoin - Why are stablecoins so important?
a. They provide stability in the volatile world of cryptocurrencies.
b. They can be used to purchase any goods and services.
c. They can only be exchanged for other cryptocurrencies.
Correct answers: 1 b, 2 c, 3 a.
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