Stablecoins are simply defined as special digital units that include the advantages of digital asset classes but eliminate the risks of fiat currencies.
Basically, there is a guarantee that there will be no sudden fluctuations in its price. But at the same time, stablecoins can be used in flexible transactions such as cross-border payments that cannot be made with fiat currencies such as the dollar or euro.
For investors who are accustomed to traditional banking dynamics and find the low volatility of fiat currencies safe, cryptocurrencies can be a good choice to enter the world of opportunities.
While there are sudden fluctuations even in popular cryptocurrencies such as Bitcoin and Ethereum, the value of stablecoins has low volatility in parallel with fiat currencies. For example, trading with cryptocurrencies is very flexible, and their values change in seconds.
However, thanks to stablecoins, you may have discovered the opportunity to maintain the same transaction flexibility with a fixed value. Stablecoins are one of the elements of the decentralized finance ecosystem where both volatility is low and flexibility is high.
Thanks to these types of benefits of stablecoins, you can both become an element of decentralized finance ecosystems and experience the stability of fiat currencies in your investment portfolios.
For this reason, in recent years, many investors, especially those who need high transaction volume, have been interested in “stablecoin investment” solutions.
Today, it is known that any type of stablecoin that can be selected through the “list of stablecoins” in the blockchain networks is one of the most reliable investment instruments. Because digital asset classes reflect their values in parallel with a fiat currency.
There is no crypto volatility, such as the dollar increasing 3 times overnight or falling to one-fifth, while stablecoins tied to the dollar have the same stability in maintaining the price. Join us in this blog as we explore stablecoins, how they work, types of stablecoins, benefits, and more in detail!
What Is Stablecoin?
In the years when blockchain technologies and cryptocurrencies were first announced, large-scale investors and global companies had a prejudice due to the risk of volatility in this market.
However, today, thanks to asset types that offer reliable infrastructure, such as stablecoins, large players in traditional banking will also enter the cryptocurrency ecosystem. Stablecoins are a special digital currency that reflects the common features of cryptocurrencies and fiat currencies.
Stablecoins are digital currencies that receive their value in a stable manner from a fiat currency. The most common examples are USDT, USDC, DAI, and PAXG. While the value of USDT is parallel to the dollar, the value of PAXG is directly proportional to gold.
Thanks to this special digital asset class, which is considered a safe haven among cryptocurrencies, it is possible to experience the speed and freedom offered by blockchain solutions together with the stability offered by fiat money at the same time.
This digital currency, called “safe cryptocurrency” by many investors, is also used by investors in many hedging strategies. Thanks to asset types that offer reliable infrastructure, large players in traditional banking will also enter the cryptocurrency ecosystem.
Because buying a stablecoin is not lacking in terms of positive aspects from $1, it even has more opportunities. Reputable and reliable digital payment platforms such as Jeton and digital asset classes that are considered safe havens, such as stablecoins, are generally compatible.
How Do Stablecoins Work?
The basic way stablecoins work is that their value is fixed to an asset. Some of these types gain or lose value in parallel with the dollar, some in parallel with the euro, and some in parallel with gold.
The value in fiat currencies is more stable than cryptocurrencies. For example, the value of the dollar does not drop to half its price overnight. However, this volatility risk exists in many cryptocurrencies.
However, making transactions with the dollar on a global scale is subject to limitations such as location, time, and amount due to international banking regulations.
Here, stablecoins eliminate this problem and are the digitally tradable form of stable value asset classes such as the dollar, euro, and gold. It is obvious that this coin type is becoming more widespread within the scope of the future of stablecoins.
What Are the Differences Between Stablecoin and Other Cryptocurrencies?
Although stablecoins include the flexibility, speed, decentralization, and transparency opportunities offered by cryptocurrencies, they differ from other cryptocurrencies in some ways.
Some differences between stablecoins and cryptocurrencies can be listed as follows:
- While the value is fixed in stablecoins, it is volatile even in the most volatile ones, such as BTC and ETH.
- While the risk is low in investment portfolios managed through stablecoins, there is always risk in other cryptocurrencies.
- While stablecoins are generally used in hedge strategies, they are also evaluated in speculative investments in other cryptocurrencies.
- Volatility is very low in stablecoins but high in most other cryptocurrencies.
These differences are the factors that investors should consider before starting a stablecoin investment project. Using Jeton via a mobile application, you can transfer investment instruments such as stablecoins to recipient accounts in different parts of the world.
What Are the Types of Stablecoin?
There are 3 different types of stablecoins. The first of these is fiat collateral. You have a digital asset class with the same value as fiat currencies such as USD and EUR. The most popular examples are USDC and BUSD.
Another type of these coins is crypto collateral stablecoins. This type of stablecoin offers price stability parallel to the value of other crypto assets. The most popular example is DAI. This type of stablecoin usually has volatile crypto collateral and is decentralized.
The third type of stablecoin is algorithmic ones. In this type, supply-demand balances are usually provided by algorithms, and price stability is maintained for investors. Having a stable value for your assets despite being in volatile markets is a good solution for those looking for reliable investment options.
Investors can access the most suitable stablecoin types for them from cryptocurrency exchanges through the “list of stablecoins.” Today, many investors create stablecoin portfolios online through platforms such as Jeton.
Why Do We Need Stablecoins?
When viewed from an outside perspective, cryptocurrency markets are considered risky by many investors due to high volatility. The main thing we need stablecoins for is to eliminate this risk.
Although it is less common in popular cryptocurrencies such as Bitcoin and Ethereum, there are constant sudden fluctuations in cryptocurrencies. However, at this point, stablecoins offer solutions as “safe cryptocurrency.”
While it offers solutions such as fast asset transfer with low fees provided by cryptocurrencies, it also offers a stable price like fiat currencies in traditional banking. In light of these elements, it can be claimed that the future of these coins will be even brighter.
Because both digital asset classes are becoming more popular, stablecoins that minimize the risk factor reach more investors. Stablecoins seem to be even more popular, especially with cryptocurrencies such as CBDC offered by central banks.
Now, even many official countries are working on their own cryptocurrencies, and the vast majority of them are considered in the stablecoins category.
What Are the Benefits of Using Stablecoin?
There are many different benefits of stablecoins for investors. The most obvious ones are
- Low transaction fees: Much lower transaction fees and commissions for global asset transfers compared to transfers with fiat currencies in traditional banking
- Fast transaction: Can be used in global transactions 24/7, regardless of bank working hours.
- Protection against volatility: Protects the value of your assets against market volatility as an example of safe cryptocurrency.
Thanks to these opportunities, investors experience the known security and stability of fiat currencies within a decentralized finance ecosystem.
As cryptocurrencies become even more popular in the near future, stablecoins are a good investment tool for investors who have a prejudice against digital asset classes to get acquainted with this digital and flexible world.
How Many Stablecoins Are Available on the Blockchain Economy?
There are many different types of stablecoins on blockchain exchanges, and new stablecoins are being introduced to the markets with projects developed every day.
The popular list of stablecoins that cryptocurrency investors of all levels follow with interest and include in their portfolios can be listed as follows:
- USDT (Tether): As the most widely used stablecoin type, it is valued in parallel with the dollar.
- USDC (USD Coin): It is an example of a transparent reserve stablecoin supported by global companies such as Circle and Coinbase.
- DAI: It is crypto-collateralized.
- EURC: Its price changes in direct proportion to the euro.
- BUSD: It is a stablecoin pegged to the US dollar and issued by Binance, one of the most common crypto exchanges in the world. It is often preferred in investment portfolios.
Innovative and reliable digital payment platforms such as Jeton already offer integrated services with reliable investment tools such as stablecoins.
Although there are many types of stablecoins on today’s blockchain networks, you should research the projects and investments behind the stablecoins that have been released before an investment project.
How Do Stablecoins Empower the World of Finance?
Stablecoins play an important role in the development of the financial world by offering blockchain solutions and traditional banking trust together. So how do stablecoins transform the financial world into a stronger one?
Although there are many different answers to this question, the most important ones can be listed as follows:
- Global access
- Traditional banking dynamics
- Blockchain-based credit
- Liquidity tools
Thanks to these solutions, investors have the opportunity to experience the low volatility and high security they are accustomed to in the traditional banking ecosystem in cryptocurrency ecosystems.
For example, EURC, as a popular stablecoin type, tracks its price collateralized by the euro. In other words, a price increase in the euro will also increase the value of this stablecoin, as in examples such as CBDC offered by central banks.
Potential Benefits of Stablecoins for Businesses and Consumers
“Benefits of Stablecoins” offers many effective solutions not only for individual investors but also for businesses. The benefits of stablecoins for businesses can be listed as follows:
- Low transaction fee payment even in global transactions
- Instant payment
- Minimizing exchange rate risk
The benefits of stablecoins for individual customers can be summarized as follows:
- Practical payment process
- Secure investment vehicle
- Decentralized transaction flexibility
If you also want to evaluate reliable digital asset classes such as stablecoins in your portfolios and use them in your asset transfers, you can sign up to Jeton right now. With Jeton, you can manage your assets and protect them safely.
While both businesses and individual investors can continue their international asset transfers quickly and flexibly, they can also maintain the trust of reliable fiat currencies such as the dollar or euro.
Can Stablecoins Be the Future of Money?
Although it is difficult to find a definitive answer to these types of questions about cryptocurrencies, stablecoins can really be the money of the future due to the features and advantages they offer.
Because it is both free from the high volatility of cryptocurrencies and includes the flexibility of digital asset classes. For example, examples such as CBDC, which we have seen many examples of in recent years, are examples of a type of stablecoin.
The increasing global interaction, the spread of digitalization, and the accessibility of artificial intelligence solutions to everyone will make stablecoins even more valuable in the future.
Thanks to stablecoins, investors can transfer any amount of assets from anywhere they want, whenever they want. This is a privilege provided by decentralized finance ecosystems and digital asset classes.
However, while these privileges pose some risks in other cryptocurrencies, the risk in such assets is close to 0. Especially with the increase in integrations in the future and the increasing popularity of digital asset classes, stablecoins are a candidate to become one of the most popular digital asset types.
These factors have to be remembered when we announce the future of stablecoins, and you can manage your global transfers with valuable investment instruments such as stablecoins via Jeton.
You can discover reliable digital asset classes such as stablecoins and evaluate them in digital payment solutions with Jeton and create your own crypto portfolio.
Ready to explore stablecoins with confidence? Jeton makes it easy to manage and move your digital assets—securely and stress-free. With features like Two-Factor Authentication and seamless crypto support, you are always in control.
Open your Jeton account today to start your stablecoin journey the smart way. Download the Jeton App now on Google Play or the App Store and take your first step into stable, secure digital finance!
