Why is it important to invest in Stablecoins?

By Moris Beracha.- The high levels of volatility of the most popular cryptocurrencies in the world have led investors to look towards price stable “Stablecoins” or crypto assets.

These are digital assets designed to maintain a stable price, linked to a stable fiduciary currency, or that are related to products or other cryptocurrencies.

The advantages of backed cryptocurrencies are that currencies are stabilized by assets that fluctuate outside the technological realm, that is, the underlying asset is not correlated, reducing financial risk.

The main Stablecoins are:

Tether (USDT) is the best-known example of stablecoins. Originally launched as Realcoin, the project was founded in November 2014 and has two tokens: USDT and EURT, pegged to the dollar and the euro. Both cryptocurrencies are connected to the Bitfinex exchange house.

TrueUSD (TUSD) is another token pegged to the dollar that is part of the TrustToken platform.

Digix Gold (DGX) this crypto asset is backed by physical gold. The project started in 2014 in Singapore, directed by Digix company. They assure that each token is equal to 1 gram of gold approved by 99.99% gold smelting from the refineries of the London Bullion Market Association (LBMA).

Dai (DAI) was developed by the company MakerDAO. The coins began to circulate in December 2017 and are backed by each user’s Ether (ETH) digital assets, held in intelligent contracts, seeking price-parity with $ 1.

BitUSD (BITUSD) was created by Dan Larimer in 2013 and is backed by the BitShares cryptocurrency platform, which also serves as a guarantee for BitCNY and BitGold and other tokens, all called BitAssets.

Basis, (former Basecoin), is a recently launched token that sets its price at $ 1, although the idea is that it can be pegged to a basket of assets, such as the consumer price index (CPI), as the holders use the currency to buy goods and services. Its approach is based on contracting and expanding the cryptocurrency supply, depending on the market movement.

Although most are used in crypto asset exchange houses, many analysts believe that it is a good step to invest in these types of currencies, in order to avoid the ups and downs of traditional cryptocurrencies and of course to avoid to a great extent the tragic consequences that could lead to bankruptcy.

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