Last week, Visa took a giant leap forward by officially launching its first trial of payments in stablecoins on the SWIFT system. According to CEO Al Kelly at a shareholders meeting last month, “Everything is still in its infancy, yet we can already see that stablecoins have the capability to revolutionize payments.” Moreover, cryptocurrencies pegged to the dollar are quickly becoming an alternative financial system all their own, as noted by RBC Crypto. With this powerful new technology transforming our global economy and offering greater access to it than ever before – now is definitely an exciting time!
Tether Keeps the “Most Popular Stablecoin” Title For a Long Time
In 2023, the use of stablecoins is on a steady rise. Three coins – USDT issued by Tether, USDC created as a joint project between Circle and Coinbase, and BUSD developed in collaboration with Paxos through the leading crypto exchange Binance – have gained overwhelming control over 90% of this market according to DeFiLlama’s research. Apparently backed up with similar value-based US dollar reserves, they all differ regarding their system infrastructure and management policies.
On the other hand, the Decentralized Structure of Some Stablecoins Attracts People
Aside from the core trio of stablecoins, there are algorithmic variants that are supported by crypto assets rather than fiat. The majority of them run on Ethereum’s blockchain and present new possibilities for decentralized finance (DeFi) protocols via their dispersed organization units and emission of freshly-minted coins.
DAI, MakerDAO’s leading crypto asset-backed stablecoin, is the prime example of a digital coin with a market cap of $5 billion and immense recognition within the crypto community. Since its launch in 2017, MakerDAO has been designed as a decentralized autonomous organization (DAO). Remarkably around half of all DAIs have centralized traditional stablecoins like USDT for collateralization purposes.
They’re Also Pretty Good For Protecting Your Money from Inflation
Even though complex decentralized tools are still far from widespread, the largest stablecoins have already become established in the real-world economy. Venezuelans are using them to purchase food despite soaring inflation rates, while European traders use them as a bridge to trade with Asian markets.
As the popularity of stablecoins continues to rise, another reason for their appeal among non-cryptocurrency users is that it offers a reliable safeguard against high inflation rates in countries with struggling economies. For instance, Central Africa and South America citizens are turning towards electronic dollars to protect their national currencies from depreciation due to hyperinflation. It has also proven more attractive than searching local markets for someone who will exchange cash at an advantageous rate.
You might check: Is Cryptocurrency World Moving Away From Privacy?