The development of stablecoins
The history of stablecoin cannot be complete without going back to the history of cryptocurrency at large.
Cryptocurrency came into being in 2009 with bitcoin being the first cryptocurrency to be launched on the blockchain.
After blockchain, there have been a lot of coins in the market and currently there are over 10,000 coins and tokens.
The blockchain keeps developing and witnesses a lot of cryptocurrency coming up along the line.
One of the most valuable developments in the history of cryptocurrency is the Ethereum blockchain which was launched with a smart contract feature.
Even with the smart contract feature, cryptocurrency is not trusted as a medium of exchange due to its volatility.
People don’t feel good about losing money.
What gain is it when I receive cryptocurrency but the value dropped after confirming payment.
As a trader and businessman, I will be at loss which is what I am trying to prevent.
Stablecoin as a solution to the volatility problem.
Stablecoins came into existence as a solution to the volatility problem with the previous cryptocurrencies.
Stablecoin are cryptocurrency which are backed with a fiat. The fiat can be any currency like the Yuan CBDC that is being planned by China.
In the cryptocurrency space today, stablecoin are backed with USD and their value is pegged at $1.
Irrespective of the forces of demand and supply, the price remains $1.
Stablecoin market cap
The stablecoin coin today is now in competition with other cryptocurrency in terms of market cap.
The value of stablecoins alone has reached $100billion with tether (usdt) leading the market.
Tether (USDT) as at last year was worth below $10billion but currently the market is valued at $62billion.
Followed by tether is the USDC which is regulated by Coinbase.
Usdc was valued at $500million about a year ago and currently worth $22.5billion.
On the list is BUSD, which is the stablecoin used on binance.
Busd was not on the radar at all last year and its opening value was about $20million last but the market is now worth $10billion.
These are not the only stablecoin in the market but they are the leading stablecoin followed by the crypto collateral backed DAI
DAI market cap is now worth $5billion from a market cap of $100million last year.
Implications of the increased market cap.
The continuous increase in the market cap is caused by an increasing demand for the coins.
Stablecoin is the best cryptocurrency in terms of medium of exchange while other cryptocurrency are being used either as investment or a store of value.
Kurepay remains your goto payment processing platform whether you want to buy, sell or swap any cryptocurrency or stablecoin.