Stable coins were created to solve or mitigate the price volatility of crypto assets. At the same time, their fashion enables them to retain other formidable features like censorship assistance and free flow of capital. This means that stable coins exist in order to offer users low-cost and high-speed transactions while doing a number on the volatile nature of digital asset prices. A decade back, there were very few of such coins to choose from. But with the creation of the first cryptocurrency, Bitcoin, cryptizens now have many options to play with. With the year 2020 just around the corner, crypto investors - especially new ones - are bound to start thinking of the best stable coins to put their money into.
This stable coin is backed by the United States Dollar, making it entirely fiat-collateralized, verified transparently. Apart from that, they are also legally protected. What makes TrueUSD stand out is transparency because their attestations are publicized, and just about anyone can gain access to the reports. This makes it one of the most stable coins ever to exist in the crypto market. The coin is under the management of people who have experience with prominent organizations such as Google, PwC, and UC Berkeley. In the near future, they plan to tokenize TrueYen, TrueEuro, and TrueBond as their asset in order for stability to become a mainstay in the cryptosphere. Traded on Binance, DigiFlex, and Bit-Z, the market cap of $213,749,697 makes TrueUSD one of the top 25 cryptocurrencies in the world.
If you have read or heard about stable coins before now, chances are Tether was a part of the conversation. This stable coin is one of the most renowned ones in the stables at the moment. As a matter of fact, it grabs one of the top 5 spots in the digital assets listed on Coinmarketcap. Under the CEO overseeing of Van Der Velde, this asset is a fiat-enabled collateralized stable coin backed by the United States dollar in a ratio of 1:1. This means that the value of Tether is smack in equivalence to the value of the USD. With a coin market cap of $1,884,587,370, Tether is the most widely used stable coin, thanks to its high adoption rate. However, in recent times, certain controversies have clouded the assets as it’s easy to manipulate fiat-collateralized currency. It has also been found that the platform behind USDT is Bitfinex.
The Gemini Dollar is much like PAX per the fact that they both were rolled out on the same day and are under the regulation of the New York State Department of Financial Services. These two platforms claimed to be the first regulated stable coins in the crypto world. Backed by the United States Dollar as well, the Gemini Dolar is an ERC20 token owned by the Gemini Trust Company, which is run by the Winklevoss twins. These brothers are well known for repeatedly proposing BTC ETF (exchange-traded funds). For every 1 GUSD, there is 1 USED held at Trust Company and State Street Bank. Each month, the balance is looked into by the BPM Accounting to verify its accuracy. The reports are made public for review, ensuring transparency. It has a hybrid online-offline approval mechanism for token issuance, providing desire security and flexibility levels. The relatively new crypto has a market cap of $86,072,734.
Circle Internet Financial Ltd - a cryptocurrency-focused firm - formed a consortium with the CENTRE open source to introduce USDC. The stable coin is as well backed by the United States Dollar and an ERC20 token available on a variety of exchanges. According to the CEO of USDC, the digital asset was built to solve underlying issues, which is why it was designed to be trustworthy and legitimately established on open standards. With a market cap of $191,727,658, the USD Coin is one of the best cryptocurrencies out there. To help with the verification of the company’s US dollar reserves, Circle Internet is employing the services of professional services firm Grant Thorton. USDC, as such, is creating many avenues in lending, investing, and trading finance. It can be used as a stable coin but lacks scalability and merchant adoption.
Known as the foremost regulated stable coin in the world of crypto, Paxos Standard was launched by the Paxos Trust Company. The digital asset bears a resemblance to the Tether, especially as the United States Dollar also backs it with an equivalent ratio of 1:1. This unique stable coin has been green-lighted by the New York State Department of Financial Services. And, according to the head of the company, Charles Cascarilla, Paxos is a representation of significant advancement in digital assets channeling the opportunities in the conventional financial systems and bringing about enablement of a global, friction-less economy. PAX coins are usually circulated, but the corresponding USD is kept in reserve at FDIC-insured banks. After redeeming, the PAX tokens are destroyed. The ERC20 token has a market cap of $167,241,364 and is supported by Ethereum wallets.
It is somewhat tricky to say one stable coin is the best for 2020 because each of them come with their own sets of pros and cons. Even though Tether is undoubtedly the most popular asset of its kind, it is not the most reliable stable coin. In 2018, there were a number of safer alternatives that appeared on the crypt market. So, everything boils down to what ticks for you.
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