Cryptocurrency News

The future of Stablecoins

Billions of crypto coins are being traded on a daily basis, but with their prices fluctuating widely in a matter of hours, it can be a very risky investment.

Today, there are about 1,500 different coins on the market, the most common being Ethereum, Litecoin and Bitcoin, but more are appearing all the time and gaining in popularity.

Bitcoin was the first digital coin, and is arguably one of the most volatile. Last year in 2017 its price peaked at an incredible £15,000 value, but since then it has dropped considerably, and is now only worth around £5,000, just two-thirds of its 2017 value. It is this validity that is stopping many people from investing, and is an issue that some developers are looking to solve.

It is for this reason that a growing number of startups are developing alternative to coins such as the bitcoin which have been dubbed ‘stablecoins’. These can be described as a digital token that is pegged to a traditional fiat currency. The idea behind this is that the volatility of the token will be reduced, and people will have more confidence in making an investment.

Tether is a great example of this type of digital coin, based in Hong Kong it is already making its name in this market, having swapped about £2.1 billion worth of fiat currency to the digitalised token form. At the moment, it dominated around 90% of the stable coon market, but its current success is prompting many other startups to give this type of coin a go.

Another finance company that is giving this a go is Circle, who is lined up to release a new digital coin called USD coin, which can be used to make payments, used in smart contacts, converted back into fiat money and much more, running on the Ethereum blockchain.

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