Stablecoins grabbed much of the attention of the crypto market last week as uncertainty revolved around Tether regarding its peg with the U.S. dollar. But what is all this fuss about stablecoins? Why is there so much talk about it in the crypto space?
Volatility is one of the major issues that are faced by the world of cryptocurrencies as of now. One day the market is seen shooting up, and the very next day, it is down on its knees. Sudden spikes and drops make this nascent market highly unattractive to the general public and investors. While on the other hand, fiat currencies are relatively very stable.
So in order to solve this issue linked with the crypto market, stablecoins were launched. These stablecoins have a peg with actual real-life fiat currencies and hence the volatility factor associated with these coins is mitigated. Stablecoins thrive to combine the best of both the worlds, the stability of fiat, and the convenience and technological innovation of the crypto world. But are they beneficial for the nascent market of cryptos? In order to get an opinion from someone who is actually involved with the development and building of this crypto world, BlockPublisher got in touch with Tyler Willis, a developer at Groestlcoin, to get his opinion regarding the matter.
Talking about stablecoins, Tyler stated:
Anything that helps to bridge cryptocurrency and fiat is generally a good intention to build on. Like most good intentions, it can lead to terrible outcomes. I don’t know if stablecoins will work long-term, but the utility they are meant to provide is a worthwhile goal.
Tyler seemed to be of the view that the intention of bridging the gap between the crypto and the fiat world shown by stablecoins is praiseworthy, but its long-term outcomes are difficult to predict.
As of now, stablecoins can prove to beneficial in order to expand the general adoption of cryptos as the factor of volatility is canceled out and more trust is developed. More security is provided to the investors in terms of price fluctuation. Stablecoins like Tether, Paxos Standard, Gemini etc. are some of the prominent ones floating around in the crypto space as of now. But all in all, one can say that stablecoins are more like a digital representation of the fiat to which they are pegged, such as USD. It will be very much exciting to see how things turn out to be for these fiat-crypto hybrids in the coming future.