MEXC Global: What is Stablecoin?

[Venus1100]

Because their prices are pegged to a reserve asset such as the US dollar or gold, stablecoins bridge the worlds of cryptocurrency and everyday fiat currency. When compared to Bitcoin, this significantly reduces volatility, resulting in a form of digital money that is better suited to everything from day-to-day commerce to making transfers between exchanges.

The idea of combining traditional asset stability with digital asset flexibility has proven to be extremely popular. Stablecoins like USD Coin (USDC) have attracted billions of dollars in value, becoming some of the most popular ways to store and trade value in the crypto ecosystem.

What can stablecoins be used for?

Reduce volatility: The value of cryptocurrencies such as Bitcoin and Ether fluctuates dramatically, sometimes by the minute. An asset linked to a more stable currency can provide buyers and sellers with confidence that the value of their tokens will not rise or fall unexpectedly in the near future.
Assets can be traded or saved.

Stablecoins do not require a bank account to hold, and they are simple to transfer. The value of stablecoins can be easily transferred around the world, including to places

Earn interest: There are simple ways to earn interest on a stablecoin investment in DeFi products that is typically higher than what a bank would offer. Stablecoins pave the way for traditional financial markets to be integrated with the rapidly evolving DeFi industry. Stablecoins serve as a primary vehicle for cryptocurrency adoption in loan and credit markets, while retaining much of the utility previously reserved for only fiat currency.

Transfer money for free: People have sent as much as a million dollars in USDC for as little as a dollar in transfer fees.
International shipping: Stablecoins like USDC are a good choice for sending money anywhere in the world because of their fast processing and low transaction fees.

 

[Suba]

Stablecoin is a type of crypto where the value is the same as the value of the peg commodity, so it follows changes in the value of the asset that is used as the peg such as USD, so that the value is stable. To date the most famous stablecoin is USDT which is pegged to USD.
Several stablecoins such as GUSD and PAX have also been qualified by the regulators of the New York State Department of the Treasury. Stablecoins are often used by traders to buy/sell other cryptos or trading pairs. Stablecoins are also often used to transfer money between countries, both to relatives, friends, etc. at a low and fast cost. I also often buy/exchange crypto (btc, ADA, Sol etc.) with stablecoins when crypto prices are in a bear market. Besides the advantages of stablecoins, of course, there are also disadvantages, such as the lack of transparency of guarantees deposited in banks. The value of the stablecoin will depend on the underlying asset such as the USD inflation rate.