Stablecoin

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A stablecoin is a digital token that is pegged to a certain value, usually in a 1:1 ratio with a fiat currency like the US dollar. For example, the USD Coin (USDC) launched by Coinbase is backed by US Dollars in a 1:1 ratio. Most stablecoins in reality deviate from the $1 position ever so slightly, 

Most stablecoins are pegged to a fiat currency, with the US Dollar being a popular choice. However, some stablecoin ventures distinguish themselves by backing their stablecoins with other assets. 

An example of this kind of stablecoin is the well known MakerDAO ecosystem, which is a stablecoin ecosystem that consists of two tokens: the stablecoin DAI and the governance/utility token MKR. The stablecoins are backed by Collateralized Debt Positions which demand Ether as collateral. There is a complex mechanism in place to ensure that the token does not deviate from the $1 value.

Stablecoins have been ascending in popularity in discussion in 2019. This is largely because there is some consensus in the idea that stablecoins are effective in combating the volatility of the market. Since the value of these tokens remain stable, investors who use stablecoins do not have to worry as much about bear markets, and can use these tokens to make investments during these bear markets to gain profit.

As most stablecoins are pegged to fiat currency, there has been scrutiny on the finances of stablecoin issuers, who must confirm that they possess the reserves to back the total value of stablecoins. This increased scrutiny has led to calls for more audits and better transparency.


Stronghold - Insights from Live AMA (16 Apr 2024) with CEO Tammy Camp

21 Apr 2024 3 minute read 0 comments CryptoGemGR

In the recent Youtube live Ask Me Anything (AMA) session hosted by Stronghold's, CEO Tammy Camp stepped in for co-founder Sean Bennett to engage with the community, providing valuable insights into the company's development, challenges, and future p...

HBD Savings - Like in the Monopoly game, Go and Collect!

20 Apr 2024 1 minute read 2 comments Behiver

It is no secret that I am a fan of putting my HBD to work through the HBD Savings account. The crypto market is volatile, any asset can go up, but later on come down. To fight this a great option is to put some of the investments in stablecoins and H...

Binance Converts Security Funds to USDC: A Wise Move for Greater Stability?

19 Apr 2024 1 minute read 0 comments KMatt

Binance recently made headlines by converting funds from its Secure Asset Fund for Users (SAFU) into USDC, Circle's US dollar-pegged stablecoin. The SAFU fund Established in 2018, Binance SAFU is the emergency fund to protect users in the event of un...

Selling crypto at high levels and putting the yields into stablecoins

18 Apr 2024 2 minute read 0 comments Behiver

One move that I never did before and which probably some did, was to take profits during the bull run and put the yields and proceedings into stablecoins to navigate the bear markets. This move not only that it ensures to provide passive earnings, bu...

US crypto regulation: Ban on unsecured algorithmic stablecoins

18 Apr 2024 1 minute read 1 comment KMatt

Senators Gillibrand and Lummis have introduced a bill that aims to ban unsecured algorithmic stablecoins. This move is aimed at protecting consumers from the risks associated with these cryptocurrencies, which are not backed by physical reserves or o...

Is Solana the future of crypto payments? Bernstein Report

10 Apr 2024 1 minute read 3 comments KMatt

According to a report by Bernstein Research, the crypto payments sector could increasingly depend on Solana. The analysis highlights how the network has acquired a significant share of the stablecoin market, with 43% of the total value transferred, s...

PayPal Cryptocurrency Begins to Take Off

8 Apr 2024 1 minute read 1 comment Talha.Khalid

Payments platform PayPal's stablecoin PYUSD has shown signs of recovery after its market capitalization plummeted. Precisely, the capitalization of this stablecoin was once again 190 million dollars (USD). As the following graph shows, this slight re...

Decoding Stablecoins: Future of Cryptocurrency or a Temporary Phase?

6 Apr 2024 6 minute read 0 comments letssittt

Stablecoins, in a turbulent world of digital currency, are the lighthouse, the bold assurance amidst the risks of extreme fluctuations that cryptocurrencies are generally known for. These remarkable digital goods are linked to these reserves that ar...

Ripple is all set to Launch its Own Stablecoin

5 Apr 2024 1 minute read 1 comment Talha.Khalid

The American company Ripple, issuer of the XRP cryptocurrency, announced its plans to launch its own stablecoin based on the US dollar.  In a statement, Ripple President Monica Long indicated that the stablecoin will initially launch on the Ethereum...

Stablecoins lose ground

4 Apr 2024 1 minute read 1 comment Stormgain

Stablecoins' share of the cryptocurrency market continues to shrink, hitting 5.8% in March. This is the lowest value since November 2021. They are also significantly lagging behind the previous bull run in terms of volume, gathering $1 trillion in Fe...