Future of Stablecoins, amidst Crypto conundrum!

 Stablecoins are cryptocurrencies without volatility. Their functionalities are a lot similar to that of a cryptocurrency, but their value is steady, more like a traditional currency. It maximizes your chances of protection from extreme volatility. Any instrument to be used for the transaction should hold some fundamental value, commodities such as oil(is used as fossil fuel), steel(is used in construction industries) or precious metals like gold, possess that fundamental value.


The collateralized stablecoin, which means their value is attached to some asset like US dollar, provides them greater legitimacy, hence security. Some stablecoins also employ algorithms to manage the supply and demand of the coin, so what is in circulation, matches what is held in reserve. Tether, USD coin, Binance USD, Dai, TerraUSD, TrueUSD, Pax Dollar, Neutrino USD are some of the examples of trending stablecoins.
Why stablecoin could be a preference over cryptocurrency and can remain in vogue. Cryptocurrency or stablecoin both skips the longer institutional processing lags, corruption, inflation, and taxation regime, yup, till they are free from stronger government regulations. But unlike cryptocurrency, stablecoins provides an adobe to an investor which includes the last person in the line, who might not qualify for the finances from legitimate financial institutions to invest, in less likely to be a fluctuating space.

But, still, there is a catch, the government holds the monopoly over issuing the money, there, it holds the power, anything challenging the authority of the government to print and spend, will be brought down quietly. This monopoly allows governments to indirectly tax citizens by increasing the supply of currencies, thus devaluing it. We have already seen, the action taken by the authorities in China, by completely banning cryptocurrencies. Moreover, they plan to issue their own central bank-issued digital currency.

Overall, alternatives to fiat currencies offer people greater choice as per their convenience and needs. Free market competition is healthy in nature, we are yet to see its results when this competition is in money. Digital currencies have a long way to go, it's difficult to conclude what future it holds. But certainly, it has created for itself a rather larger space for now.

Your job as a smart investor is to separate the facts and the news, from the fiction and the noise. — Chamath Palihapitiya
Invest what you can afford to lose.

 If you like, what I write about, follow my blog, become a part of my journey ahead. Give me all your suggestions, about what you want to read. I am all eyes, for your valuable views.

Comments

Post a Comment

Popular posts from this blog

Why bother about Women's Empowerment? Are Masculine and Feminine two separate entities?

 The image shows Shiva, an Indian Deity in his Ardhanarishwara form. He is the symbolism of ultimate masculinity, but you will see in the  Ardhanarishwara  form of Shiva, one half of him is a fully developed woman.  ‘Ardha ’ is half;  ‘Nari’  is women;  ‘Ishwara’  is lord, Shiva. This is basically trying to manifest that the masculine and the feminine are equally divided within yourself. This article is not about lecturing you, why women’s rights are important or asking you to pick up a banner and start marching on the road, or start posting on your social media accounts or get into a debate with strangers that might end up into a fight. Hi, I am biologically a woman and I am writing about this to better understand myself, what I want as a woman for myself and from society. Let me begin from the beginning. The creator of this mesmerizing world must have given a thorough thought before creating these biological differences in every living entity on...
Read more

Is Money everything in life? If not, what is beyond money in life?

  Money is a medium of exchange for buying things, there are goods and services that are absolute necessary for short-term and long-term goals in life. But, yes beyond that, being a hoarder, whose sole purpose is to keep feeding bank accounts, is not necessary. Engage oneself in work that gives internal satisfaction is healthy and wise. Beyond money in life, what are some of the important things, according to me: 1)  One’s relationship with oneself:   The most important thing, I always knew, I always read and heard, but not felt like now, ever before. You want to help people when you don’t know yourself, It’s not going to work. At least with your closest people and in life in general. You first need to sort yourself out and keep working at it. I believe, it's every person's own journey, which they have to complete here while living, but generally, it is too late, when we realize this, we are already caught up in a worldly mess or are generally taking our last breath, that...
Read more