Volatility meaning, Isn't the only thing cryptocurrencies are about. Stablecoins are created with the intent to keep a set price. There is a huge market for currencies that combine the advantages of blockchain technology with the capacity to track a more stable commodity, especially in a sector where coins and tokens might crash overnight. It is worthwhile to educate yourself about stablecoins and the advantages and disadvantages they have if you haven't already begun utilising them for trading or investment.
“Stablecoin is a digital currency that is stable through the reserve of some assets like gold, US Dollar.” Because the prices of stablecoins are tied to a reserve asset like the US dollar or gold, they serve as a bridge between the worlds of cryptocurrencies and conventional fiat money. In comparison to something like Bitcoin, this significantly lowers volatility and produces a type of digital currency that is more suited for everything from daily business to conducting payments between exchanges. For example, businesses might accept $5 in Bitcoin for a coffee one day, but the next they might discover that their Bitcoin is worth 50% less. Planning and running a company that takes cryptocurrency payments is therefore difficult.
USDT – US Dollar (Tether)
DAI – US Dollar (MakerDAO)
BUSD – US Dollar (Binance)
You can now purchase real estate with stablecoin, or create interest on loans. It is a payment or exchange solution. Stablecoins are open, accessible to anyone, and global in USDT to INR on the internet, 24/7 time. They communicate quickly, inexpensively, and securely, also we can see a trading view. They can be programmed and are digitally native to the Internet.
2. Secure transaction: Users can transfer stablecoin with higher security. Because stablecoin work on blockchain technology and they are designed to maintain stability. With these coins rare chance to go low price so, once users invest then money will be secure.
3. Traders and investors can use portfolio hedging: Stablecoins can be used to lower overall risk by making up a portion of a portfolio. You'll have money on hand in case a fantastic opportunity arises, and your portfolio as a whole will be more resilient to changes in market value. During a market slump, you can also exchange your cryptocurrency for stablecoins and then buy them back at a lesser cost.
4. Regulation: When it comes to disclosures, what assets are kept in reserve to back the coins, and redemption rights, stablecoins are operated under a variety of laws that are governed by a patchwork of state regulations.
After considering all points we can say there are risks associated with everything, especially with the digital currency it doesn’t mean it is stable or not. This dynamic era will develop, expand, and splinter into new regions at the speed of light. This is fantastic and, in the opinion of many, exactly what the blockchain industry needs. We see how it is risky for centralization. Its model is fully based on decentralized creates problems for those working on centralized platforms. Additionally, low fee structure and security make stablecoin more beneficial for those who investing in stablecoins.
by Monika Gupta