Rancakmedia.com – Cryptocurrencies are often characterized by dramatic price movements and severe volatility. But there is one cryptocurrency that is intended otherwise, which is called Stablecoin.
Stablecoins should offer coins that are stable in price. This implies that these coins have the same value from the day you buy them until the time you use them or exchange them.
This currency manages to maintain price stability because it refers to currencies such as the US dollar, or commodities such as gold. Although many stablecoins are currently pegged to the US dollar.
Due to their relatively stable price, most investors acquire stablecoins not for profit, but as a location to store money in the crypto infrastructure and to use when buying and selling other assets.
"They are a tool of the trade," said Stephen McKeon, professor of finance at the University of Oregon.
Stablecoins were originally formed in 2014 to help simplify transactions in crypto systems, because at that time banks were unwilling to provide accounts to crypto companies.
Given the anonymity of crypto traders and the possibility of money laundering, terrorist financing and tax evasion, banks are not interested in having such companies on their books.
“Bitcoin miners and Bitcoin exchanges, everyone wants a way to use US money without having to go through the banking system,” added McKeon.
While other unlawful activities remain a problem, the crypto market has become too big to be ignored by certain banking and government sectors.
Therefore, nowadays several banking giants and authorities are starting to get involved with stablecoins. Even a number of central banks from various countries are reviewing the potential of launching their own digital currency.
Conclusion Regarding the Difference between Stablecoins and Other Cryptos:
Stablecoins should offer coins that are stable in price. This implies that these coins have the same value from the day you buy them until the time you use them or exchange them. Most investors acquire stablecoins not for profit, but rather as a location to store money in the crypto infrastructure and to use when buying and selling other assets.