Inevitable! I am using this word because- blockchain technology, cryptocurrencies, the age of the internet, Decentralized Finance, the internet of money- is inevitable. Patrik Harker, the president of the Federal Reserve Bank of Philadelphia pronounced stablecoins are inevitable. Now you know what I am talking about! Stablecoins have emerged as the medium between traditional finance systems and crypto markets. These derivatives need a certain kind of stability and reliable base value for conducting activities like borrowing and lending. Get on a joyride with Cryptocurrency Exchange Script, and learn how to grab stablecoins and initiate your DeFi journey.
What are Stablecoins?
Stablecoins are cryptocurrencies designed so that they can minimize the volatility of the price of the stablecoin relative to some “stable” asset or basket of assets. A stablecoin can be pegged to a cryptocurrency, fiat money, or exchange-traded commodities.
Stablecoins: Ethereum Network
In 2019, the Stablecoins industry took off with over 200 different stablecoins issued by companies worldwide, of which 50% were on the Ethereum network. At present, 74% of all the stablecoins are issued on Ethereum. As of 1st January 2021, it is worth around $20 billion. Like ERC-20 tokens, stablecoins, too, have all the benefits of the Ethereum tokens. They are efficient and effective in managing and producing issuance, inbuilt-global reach, making it easy to transact across global markets, entirely suitable, and the most crucial feature- interoperable with all other tokens of Ethereum.
Stablecoins were introduced as a means to represent a standard unit of dollars. It has helped in lessening the volatility of the entire crypto market. It is very efficient for traders to use stable coins; they don’t have to exit the exchange and transfer fiat while dealing against the price declines.
Stablecoins are now an option replacing inflationary fiat currencies. There has been an exponential rise in the three largest stablecoins, USDT, USDC, and DAI, in 2020, which increased the intensity of trade volume on the Ethereum network better than its own asset ether (ETH). An annual transaction of $385 billion was recorded for ETH, but Tether’s USDT token settled $580 billion on Ethereum, Circle’s USDC stablecoin settled $239 billion on Ethereum, and MakerDAO’s DAI settled $98 billion. Precisely, around USD 1.6 trillion in stablecoins and ETH transacted on Ethereum in 2020.
|An Ethereum coin can represent a US dollar, with each token issued backed up a corresponding US dollar in treasury.
|An Ethereum stablecoins can be collateralized by other digital assets like ETH, BAT, or USDC
|An Ethereum token can be created to represent a stablecoin deposit earning interest.
|Introduced by Synthetix, where sUSDC is backed by SNX holders, who are awarded for offering collateral and stability with fees generated by Synth transactions.
|An Ethereum token can be programmed to optimize in search of the highest yield opportunities or have its treasury managed through minting and burning of existing supply.
Start your DeFi journey with our stablecoins and MetaMask like wallet
The best opportunity to join the fantastic journey of Decentralized Finance is by downloading our MetaMask like wallet, which will be readily available as a browser extension or on mobile. It will be like a key vault that only you can access, a secure login, a wallet to view tokens, and a way to exchange tokens or access the decentralized world. A simplified experience of managing your money, digital assets, unique art, and activities on decentralized finance applications.
Long thing short, one needs to get some ETH before getting stablecoins in their MetaMask like wallet.
With the exponential growth of Stablecoins, it became a subject of legal discussion. Various lawmakers in the USA introduced the STABLE act, which if passed, would necessitate stablecoin issuers to get a federal banking charter and be required to obtain the Federal Reserve and the Federal Deposit Insurance approval Corporation (FDIC), six months before issuance.
Contrary to the STABLE Act, the US office of the Comptroller of Currency (OCC) issued a letter- which cleared the air by clarifying that national banks and federal savings associations are permitted to operate blockchain nodes and use stablecoins for payments. Moreover, towards the end of 2020, the European Central Bank issued a written statement stating that widely accepted stablecoins “could threaten financial stability and monetary sovereignty’.
The air is still not clear on how governments around the globe will treat privately-issued stablecoins. With the increase in the stablecoins enthusiasts, they embrace more and more regulatory options to make sure it falls under a more secure regulatory framework.
Blockchain is a kind of Venn diagram where finance and technology meets. In the latest tech world, one can not pay the price of being in the number two position. Countries like China are developing their own digital currencies. If you are hesitant about this world of crypto, blockchain, and stablecoins, Cryptocurrency Exchange Script can be the anxiety pill for you.
Why Pick Cryptocurrency Exchange Script?
Cryptocurrency Exchange Script is the best option that offers blockchain and cryptocurrency Solutions. It facilitates the following advantages to its users:
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