The most trusted stablecoins
The adoption of cryptocurrencies has doubled this year due to new partnerships and the high returns of assets such as Bitcoin, Ethereum, Litecoin and others, driving potential new users to fill their crypto portfolios in order to obtain excellent profits in the short, medium and long term. . However, the volatility of these assets influences the finances of those who think of crypto as a simple means of carrying out transactions and not as an investment. For this reason, tokens known as “stablecoins” have been created which have a direct correlation with fiat currencies such as USD and EUR in which the total supply of coins equals an amount of fiat money.
These coins can be sent and received just as you would any other cryptocurrency and they serve to keep your savings without worrying about a market crash.
Furthermore, it has allowed Spot market traders to buy their favorite assets for a low price and then sell them in stablecoins at a much higher price.
What is a stablecoin?
Stablecoins by definition are cryptocurrencies whose value must remain stable and backed by another asset such as a fiat currency, although this support relationship can be established through money, metals, commodities, raw materials, etc. The purpose behind the creation of stablecoins is to maintain a minimal variation with respect to the asset that backs these tokens.
Stablecoins exist on a blockchain and have all the features and benefits of a conventional cryptocurrency, while allowing you to keep your capital intact in the face of the high volatility that distinguishes the crypto market.
The fact that the cryptocurrency market is constantly fluctuating and easily enters downward or upward trends, means that many people who wish to have their capital at rest cannot ensure a good level of liquidity due to these unforeseen events.
Stablecoins have managed to mix the globality, decentralization and low volatility of cryptocurrencies with the stability of fiat currencies thanks to this collaterality.
The most trusted stablecoins in the market
There are different stablecoins that are traded in the cryptocurrency market, and although most have almost the same value, they differ in multiple aspects. From companies that sponsored their launches, networks in which they operate, supply system, reliability, technology and more.
We will analyze the most trusted and why they have obtained this title, in order to determine which could be more viable for our investments.
Tether (USDT) is a stablecoin anchored to the value of the USD, which was established through the 1: 1 relationship between the fiat backup reserve and the existing tokens, so basically each USDT token will be worth 1 USD or very close to it .
Although Tether is probably the most criticized stablecoin for doubts about whether fiat reserves have been audited for real or not, it is the most popular in the cryptocurrency market and has the highest transaction volumes, causing users to move large amounts. through this token.
- At the time of writing, the USDT market cap is $ 24,237,804,202.58 and it continues to rise.
- Tether was launched by the company Tether Limited, which is led by its CEO Jan Ludovicus van der Velde, who also runs operations at Bitfinex.
- Bitfinex CTO Paolo Ardoino has stated that Tether is registered and regulated by FinCEN, as are centralized competitors in the crypto space.
- The controversy over how Tether is backed has been causing a lot of uncertainty among traders and members of the crypto community, and although each token is supposed to be backed by its fiat equivalent, Tether claimed that it is not 100% backed by auditable money in bank accounts and that much of the backing is in cash.
- So far there has been no official audit of Tether’s reserves, although the SEC is in proceedings to prepare the first audit of the stablecoin.
- In terms of market volume and technology, USDT has been highly reliable in the market and many users have invested their capital in Tether. Although legally speaking, it is not exactly the most transparent project we have seen.
- You can buy Tether in basically any cryptocurrency exchange that allows trading such as Binance, Bitfinex, Poloniex, OKEX, Kraken, Bittrex, Exodus, Bitpanda, etc …
USDC is a stablecoin controlled by the Center consortium, which was founded by Circle and includes companies like Coinbase and Bitmain, the mining giant. This coin debuted in May 2018 on the cryptocurrency market as an ERC20 token belonging to the Ethereum chain and with a highly credible endorsement by those who were behind the project.
- USDC’s market cap stands at $4,729,345,573 at the time of writing, although this could change quickly depending on how the situation with Tether is resolved, as many investors would migrate to what is considered “the safest stablecoin of all”.
- Unlike Tether, USDC is regulated in the United States and meets all the parameters imposed by the corresponding regulatory bodies, even remaining under the recommendations of the FBS.
- The latest audit conducted of Circle’s reserves to support USDC was carried out by a constant firm called Grant Thornton LLP, which demonstrated that in effect the amount of tokens did not exceed the balance of the USD account.
- With high real financial support thanks to the main investors in the project and 100% auditable accounts, USDC has proven to be the safest stablecoin on the market and with an excellent level of market cap. This stablecoin could become as much a part of the market as USDT does today.
- You can buy USDC on several cryptocurrency exchange platforms such as Coinbase, Binance, Bitpanda, Poloniex and plenty more.
BUSD is Binance’s stablecoin which was created to have a 1: 1 ratio with US dollars. As with other tokens, on the BUSD network there will be as many tokens as there are dollar reserves as backup. This coin has benefits such as more than 8% interest just for saving money through programs such as Binance Savings, where Binance users can receive passive income in another way.
- At the time of writing, BUSD holds a market cap of $ 1,095,520,301, presenting a 2% increase over previous levels. Although BUSD is the stablecoin intended for Binance, it is still not as popular as Tether and USDC, resulting in a lower transaction volume. However, it should also be noted that BUSD has been in the market for less time than its competitors.
- BUSD was launched in 2018 by a blockchain company called BeTreasury, which is based in Zug, Switzerland and created the stablecoin as a Dapp project. Like other stablecoins, BUSD is designed to keep the 1:1 ratio as accurate as possible and to counter market volatility.
- BUSD is regulated by the New York State Department of Financial Services (NYDFS), who also approved its launch. This regulatory institution directs the audits carried out on the stablecoin in order to check if the bank accounts really support the tokens in circulation.
- Like USDC, BUSD is in impeccable legal condition and its reserves have been approved as legitimate by the NYDFS, making it a 100% reliable and transparent stablecoin. For users who want to save fiat currencies in crypto, BUSD is an excellent option in the short, medium and long term.
DAI is a stablecoin whose value is anchored to the United States dollar, seeking to maintain the 1:1 ratio just as other stablecoins on the market do. DAI is an ERC20 token and unlike other currencies that are backed by fiat in bank accounts, it maintains equity with the dollar through a system of smart contracts, which take place on the Ethereum chain. This is one of the few fully decentralized stablecoins and is backed by ETH.
In addition, DAI has become very popular for promoting a whole DeFi (Decentralized Finance) ecosystem where many users have obtained passive income from loans and staking.
- The current market cap of DAI reaches $1,418,131,355 and there is a total supply of 1,416,981,847 DAIs. The fact that this stablecoin has been created on decentralized bases (which work through smart contracts) makes a large part of the crypto community prefer to invest their capital in this project instead of those launched by centralized financial companies.
- DAI was created by MakerDAO and was launched on the Ethereum Mainnet in 2017. The idea behind the creation of DAI was to create a safe and stable value system that, unlike assets like Bitcoin and Ethereum, would maintain a fixed price just as Some fiat currencies do, at least those that are not subject to significant devaluation rates.
- The development and supply of DAIs is directly regulated by MakerDAO. Being a decentralized stablecoin, DAI does not respond to regulatory measures from any specific institution nor can it be modified by any.
- Although it is true that smart contracts could be violated, they represent the best option to comply with the established terms between decentralized transactions. DAI is very reliable and has earned a very good reputation within the cryptocurrency market.
PAX is a stablecoin on the Ethereum blockchain, so it is what is known as an ERC20 token. As it is a stable currency, its price is fixed to that of some important fiat cryptocurrency, which in its case and as in that of the vast majority, is the US dollar. This token benefits from blockchain technology that allows it to offer instant worldwide transactions, immutability, decentralized accounting, and decentralized transactions. PAX’s US dollar backing has been confirmed, so you can exchange 1 PAX for 1 USD at any time.
- The current market cap of Paxos exceeds $245,174,641, as a result of its high commercialization on different platforms such as Binance, Coincodex, Paxos.com, Bitfinex and more. Like the other stablecoins, PAX can be used as a pair with other cryptocurrencies for advanced trading, giving the trader a stable position.
- The PAX team saw a great opportunity for their project launch when Tether was accused of printing Tethers out of nowhere in early 2018. The PAX team has tried to offer an alternative that is as transparent as possible, for which They use an audited smart contract that issues and burns their tokens. This smart contract is audited by the smart contract auditor Nomic Labs. Withum, one of the main auditing companies in the US, regularly checks the reservations.
- PAX is an excellent and reliable alternative as a stablecoin, although it does not have the highest transaction volumes in the market. However, the crypto ecosystem continues to grow and much remains to be seen from this project.
EURS is an EUR-backed stablecoin born from a Malta-based company called Stasis. This coin exists in the EIP-20 standard of Ethereum and states that its support is a straight 1:1 ratio with EUR, so we could basically describe this stablecoin as a tokenized EURO.
Stasis affirms that they created EURS to satisfy the needs that are being presented in the European Union with the technology of cryptocurrencies, specifically of the investments that are entering this market. The CEO of the company Gregory Klumov affirms that his intention is for large investors to enter the cryptocurrency market, that not only are retailers but also entities with large capitals can access this world through EURS.
- You can buy EURS on exchanges like Globitex, HitBTC, Binance and Changelly. This stablecoin is mostly suited to European users who base their economy on EUR and want to have more precise control of their trading operations.
- The market cap of EURS is US $ 38,314,063 and each token is equivalent to US $1.20. The market cap of this stablecoin is relatively low compared to others backed by the USD.
- The EURS project is totally legitimate and is trusted by almost all users who want to keep their savings in Euros.
EURB is a stablecoin directly pegged to the value of EUR. We are talking about a regulated token that allows financial institutions and an entire network of users to invest in this coin to carry out crypto transactions without risk.
- It was launched on the Stellar blockchain on December 10, 2020 by Germany’s Bankhaus von der Heydt bank, being the first stablecoin backed by Euros officially issued by a reputable Financial Institution. Digital asset custodial technology provider Bitbond also participated in the launch as a partner.
- EURB will not be available for crypto trading due to the strong regulatory and KYC measures imposed, although it will serve to complete transactions and make payments.
- The stablecoin is regulated and approved by the German Federal Financial Supervisory Authority, who have also approved the issuance of tokenized bonds on Stellar.
- The tokens are 100% backed in EUR, which will be audited in the reserve accounts by the corresponding authorities.
- Despite the fact that this stablecoin has not yet debuted in the markets and remains an emerging project, it already has the trust of multiple companies and institutions due to its impeccable origin.