What Are Stablecoins?

Stablecoins are different from so called fiat currency. A FIAT currency is supposed to remain stable in value and not fluctuate wildly if not affected by economic instability. Because of this, stablecoins pegged to fiat currencies are likely not to decrease in value over time. If you own a stablecoin, you can lend it to someone else who needs it.

how stablecoins work

How Stablecoins Work?

The stability of stablecoins makes them appealing for many investors. They provide financial stability within the cryptocurrency system. The US dollar is a good example of a stablecoin. The value of this coin has barely changed from its initial $1 value. Bitcoin, on the other hand, was worth about $4,000 at the beginning of this year and $60,000 by May 2021. Unlike the USD, stablecoins are not subject to the same volatility, and you can invest in them without worrying about your investment.

What Are Advantages of Stablecoins?

There are many ways to use a stablecoin. One common example is a rental property. You can set up a smart contract between a landlord and a tenant that automatically transfers the rent on the first of each month. You can also set up decentralized lending, monthly subscriptions, or recurring donations, and automatic payments. This can make stablecoins popular, especially in developing countries. If you’re a real estate agent and want to get a foothold in cryptocurrencies, consider purchasing a stablecoin.

Stablecoin, a Gateway to Crypto World

Stablecoins are also considered to be a gateway to the cryptocurrency world, where in most of the cases stablecoins can be used to purchase the most of the cryptocurrency altcoins including Bitcoin, Ethereum, and Binance BNB coin.