Stablecoins are Prime to Bridge the Gap Between Fiat and Cryptocurrency Adoption Globally
Stablecoins have been growing in the virtual currency market in the last years. They are a good way to hedge against volatility in the cryptocurrency space.
The most popular stablecoin is Tether (USDT) which has been involved in different controversies over the past years due to the lack of transparency handling its funds. Nonetheless, there are many other options available.
Stablecoins Could Help Increase Crypto Adoption
Stablecoins are generally pegged 1:1 to a fiat currency. Most of the stablecoins in the space are tethered to the US dollar and play an important role in providing stability to users. There are many individuals and experts in the space that think so.
Erik Voorhees, the CEO of the cryptocurrency exchange ShapeShift believes that stablecoins are important for the virtual currency market as a whole. As he mentioned they could work as a bridge between the old world of finance and the new era of digital finance.
Stablecoins are important in the same way that a bridge is important. You may not care much about the bridge, but without it, the beautiful land beyond is much harder to get to.
— Erik Voorhees (@ErikVoorhees) April 19, 2019
This is also something that Yoni Assia, the founder of eToro also believes and supports. Thus, without stablecoins, it is much more difficult to unite these two worlds and connect them one with each other.
In the past, Voorhees commented about that:
“A stable crypto coin is super useful… Both for the rich finance person who needs stable collateral against smart-contracts, and the poor Venezuelan trying to take shelter from currency debasement. Not a replacement for BTC or true cryptos, but a helpful argument to them.”
Tether has been the most popular stablecoin in the space, but due to the fact that the coin has been involved in different controversies, there are new competitors in the market that are trying to take its place or, at least, compete against it.
The Gemini Dollar (GUSD), for example, allows users to send and receive US dollars using blockchain technology. This digital currency has been created by the Winklevoss Twins and it is used in the Gemini exchange. USD Coin (USDC) is another popular stablecoin that is backed by Circle and has been embraced by several exchanges as well, including Coinbase Pro.
Other stablecoins include DAI, TrueUSD (TUSD) and Paxos Standard (PAX). There are also many others that are pegged to other fiat currencies such as the Euro but have a smaller market capitalization and market penetration.