Stablecoins are cryptocurrencies that have their values tethered to assets such as the U.S. dollar, precious metals such as gold, real estate and even other cryptocurrencies in order to maintain value.
They were created as a response to the crypto markets’ well-known volatility, providing price stability through reserve assets. A cryptocurrency should continue to serve as a medium of trade and a means of storing wealth while maintaining its purchasing power over time. Stablecoins such USD Coin (CRYPTO: USDC) succeed where unstable cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) do not.
These dollar-indexed coins, unlike Bitcoin and Ethereum, are not intended for trading or investing. Rather, they’re designed to make trading on numerous crypto exchanges smoother. Instead of buying Bitcoin with fiat currency, a user would purchase a stablecoin with the fiat and then exchange the stablecoin for another cryptocurrency.
The advantages are mobility, accessibility and security as these coins are …
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