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Stable Coins: What Are The Pros, Cons and Possibilities?

Stable Coins: What Are The Pros, Cons and Possibilities?

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Stable Coins: What Are The Pros, Cons and Possibilities?

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Research Report - Stable Coins

The emerging segment of stable coins comprises a lot of controversiality. Some proclaim the stability to be the holy grail of crypto, solving the issue of volatility and opening a path to mass adoption. Others oppose with criticism of stable coins, arguing they compromise the ground ideas of cryptocurrencies. There surely are challenges and issues, such as centralization and trust. However, the sector possesses opportunities to address the market of all of the money in the world by offering a superior solution. This ambitious vision requires tremendous responsibility from the creators of the stable coins. The question is if the developers will be able to meet the expectation while complying with the economic principles of price creation, an open market and pegged exchange courses.

 

Questions:

Which stable coin solution has the most promise for the future?  

What do you think the growing number of stable coin projects mean for the Cryptocurrency industry? 

 

@IntelligentTradingBot:

Try out our free trading bot on telegram @IntelligentTradingBot where we send trade alerts with stable coin base pairings.

 

 





43 COMMENTS 26 VOTES

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میلاد فایلس داک باکس طراح نوین ایران واتساپ اپ یامور علی اسدی موزیک پرشین وب رویال مارکتینگ امداد بهار فیشان فست فود 24 تن ساز همراه بابا کتاب آی 200 لترا سافت کالابید پروکام خرید گیفت یزد فیک مای گنجا موزیک حسن محمودزاده میثاق پرینت لیزر ای گرو گروه لیزارد سسول اسخی تیام موزیک معراج بوشهر فاکتورساز رایان مخاطب خاص مسکن کرد وبسایت 50005 کلیک مستر آی شونه پیشتاز تراش استدریکا های کاب مجله استوری پروژه VB پارسی سی دی سحر چکاوک ام تی بی تک نیک دکتر شریف شرکت پی تی اس ایمن فک شهر خوی علی طاها سپنتا سیستم تکثیر شاپ تهران وب پرجیوا سرای مهر شرکت پرند ای پو دی ال شرکت مهرآسا آپاچی آل لینک سیپل الماس گارنت بارسلون طاها اسپورت شرقی تیم برتر سیاه چوقا پارس آبی مبل سرا تیبل سستم تک شبکه وب شو امتیاز ایرانیان میهن کرافت رضامون چی چی دانلود شهناز موبایل کامرس همدان ری دانا آی تی سمیرم نیاز دانلود اس ام اس شوک دکتر شایان دانلود نرم افزار اف سی دی ان فبای مرکز فیلم شارژ من ویکو اف سی دی ان الگرو ویسوت ویستور سیرووس رضا اخباری تیماپو آی سی تی آس اس شاپ کد آنلاین فرا سیگنال شرکت متنا صفا رایانه پرینت مدرسه فاطیما یک تب وبساران آینه شمس فانی بیست شرکت السا پرشین تکنولوژی استدیو الماس کلاسیک وب ابد مارکت پزشکی ورزشی کاشی پرسپولیس چهارسوق پرشین واو بوشهر تبلیغ حامی عمران ایران نت صدای آب ربات تی ام پرشیا تراول شم تی تی سی آبی انگلیس فروشگاه اف ایکس شارژ اسپایدر زون شاهد ایلیا تورنادو کتابخانه اینترنت اسکای اسویم دهلرانی آن اس ام اس گروه آبان دبلیو دکتر نوید یک و یک برج تی ام پترو سپاهان آموزش گلستان تولباند گروه مهرگان شرکت بی اس تی مزه فوتبال آسا سیستم میثم موزیک دی جی بک لینک های بک لینک تهران بوتیک پارسیان الکتریک ونیچ تی دبیلو gps سایت ordee شاپ مد آوای سلماس لوح مثبت مباشرون ترویان سه دی وی دی را سافت صاعقه گیر بیر موزیکال موزیک مجاز کیان موزیک سونار موزیک دنج موزیک موزیک استایل پرشین موزیکز آریس موزیک آب موزیک موزیک ها جام موزیک سرنگ موزیک سو موزیک طبس موزیک موزیک پا ماهور موزیک گلبانگ موزیک ازت موزیک لیمبو موزیک آنلاین موزیک استریم تکفا موزیک اپیک موزیک آبی موزیک کناری موزیک اس ام اس موزیک پی ام یار وبسایت موزیک مجتبی جباری قالب جوملا انتظار سی سی سارونه آریا سرور بیرجند کار جی اس ام SMS تک نیاز ره پیام

4 months ago

sdfdsfsdf

4 months ago

PAI looks very promising.

5 months ago

really don't understand this, I always encounter this on internet and people predicting that this would be make the society cashless in the future. It is like a token that you bought from the game stations. Its valuable in the market but, it will make the society less of taking cash out with them but, the only problem is if all the merchandisers will also adapt it. This is good for big businesses but not for a small enterprises.

6 months ago

puneet kumar new user

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7 months ago

I really don't understand this, I always encounter this on internet and people predicting that this would be make the society cashless in the future. It is like a token that you bought from the game stations. Its valuable in the market but, it will make the society less of taking cash out with them but, the only problem is if all the merchandisers will also adapt it. This is good for big businesses but not for a small enterprises.

9 months ago

Abraham Lincoln new user

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9 months ago

Stable coins will be crucial in creating consumer and investor confidence towards cryptocurrencies. Capital investors and fund managers can't possibly invest in current cryptocurrencies because of the lack of juridical and financial liabilities. For investors there is a massive risk for loss of capital. Namely high market risk, high liquidity risk and high issuer risk. Growing number of stable coins would in my opinion bring higher levels of crypto implementation and utilization in real world applications. This would in turn create value for the coins and build investor (private and professional) trust in the crypto market. Mitigating the gap between crypto enthusiasts and the "John Does" is crucial for the long term growth of cryptocurrencies. Financial growth will surely follow as people will become more willing to trade cryptocurrencies and trading volumes rise. This would also reduce the volatility of currencies and the impact of malicious manipulation of the crypto market. Market risk comes from the high volatility of crypto markets. Because of lax regulation and possibility of fast acquiring and disposing of currencies pump & dump schemes are common. There are some concerns about leaving loopholes in contracts regarding the modification of coins after ICO. There is also the possibility of lawmakers imposing new legislation regarding cryptos. Legislation could, for example, elevate taxes for realization of crypto earnings or require mandatory security measures for coins. High liquidity risk arises from high saturation of crypto market. When a coin hasn't been implemented in the real world, it's main value comes from people wanting to pay for it. Developers, code or ideas do not have value for investors, if they are not making revenue. Coins rely strongly on implementation. Traditional stocks usually have assets, such as real estate, physical product and valuable contracts (resale and patents for example) which are made to assess the capital risk faced by the investors. Cryptocurrencies are not backed by these assets and in the situation where the coin loses value, there is really nothing you can do. The gold standard used widely in western world from 19th to 20th century worked because currency backed with gold could be traded back to gold and vice versa. The price of stocks and indexes rises because the value it's based on is growing. With cryptocurrencies the only value rising behind a coin is the implementation or the incentive to buy the coin. When the trading of the coin slows down, the price also comes down. With tokens, during the ICO usually the organizers keep huge reserves of the coin. The issuer risk comes from the fact that there is a major principal-agent problem. When the developers so please, they can just sell their coins and make huge financial gains at the coin owners expense. For cryptocurrencies to become stable, they would need to address these issues by imposing regulation and growing responsibility and transparency. In my opinion, this in contrarian to the core value of decentralization driven forward by most of the coins.

9 months ago

I think we have to go back to the definition of a stable-coin. Stable coins are introduced as 'in between solution' pegged to 'none crypto assets' as gold, usd, etc What do you think the growing number of stable coin projects mean for the Cryptocurrency industry? I am not sure if we need that much amount of stable coin. Stable coin is a bridge between fiat and crypto money. For my thinking less is better. We can just have stable coins for other fiat money for example pound or euro.

9 months ago

Acong Cruz

Focuss

coins that are useful for paying for a product or service that is mainstream. for example, to pay trading fees, online taxi services, small and instant things, but very important for everyday life. difficult but it must be there. Some say ico is just ico, raise funds, get funds, then somehow where the funds are. there are many projects that only promise tomorrow, many updates are just for formality, even the updates are not important at all, even there are no products.

9 months ago

Sukanta Ghosh senior

USDT and NUSD

9 months ago

K Henriques new user

Well experience with over 20 years in business development and engineering

By focusing on creating stable coins may solve some vulnerability of cryptocurrences adoptation, but does not solve the issues of the security gaps within the blockchain network itself. There are currently coins that could become stable enough for adoption as a world currency. A major security gap being the vulnerabilty of amount of coins being stolen and although Blockchain has to power to track all coins across the network, there is an unwillingness in providing effective policing, so a trustless environment is also an untrusted environment for potential investors. Moving forward in having stable coins will need a stable trusted blockchain environment that will effective police the network and stop the stealing of coins, even if there is a need for human intervention whenever there are breaches.

9 months ago

I think we have to go back to the definition of a stable-coin. Stable coins are introduced as 'in between solution' pegged to 'none crypto assets' as gold, usd, etc More and more so called stable coins are offered. In my opiniun it's creating ALT-stable coin generations. Allmost every exchange has its own coins/tokens. Can these be considered to be stable coins too? Underlying value has to be secured by trusted capital and can be exchanged to other assets of choice any time. The key question is what is 'trusted capital' and can it really be trusted with or without regulation?

10 months ago

I think that the growing number of stable coin projects means that the cryptocurrency industry will be have a lot of fierce competitors at the top. I know bitcoins is a solid cryptocurrency and if stable coin is going to try to push their way to the top I'm sure other companies are going to try to do that same. The company looks like they have a lot going for them, I would love to see how they do in five years!!

10 months ago

Gregory P expert

This is definitely a hot topic. Stable coins can have serious difference in price from exchange to exchange. I believe the new stable coin by circle, and gemeni could propose solutions to the underlying problem of the USDT not being the stable coin it was promised to be. Also, tether prints and burns its coin as it deems necessary. I think the growing number of stablecoins means that developers/businesses are proposing new solutions for the underlying problem with USDT and could be a very good thing for the market. we will just have to wait and see. Look at the Petro, i don't believe it is supposed to be a stable coin, but it has a high market cap because it is supposedly backed by oil and gold, but venezuelas oil company is drowned in debt.

10 months ago

There has been considerable effort and innovation put into solving the problem of volatility, and it has not yet garnered the attention it deserves. Stable coins are a new class of cryptocurrencies under development which hope to revolutionize the crypto world, and the world economy by bringing decentralized monetary policy into the blockchain space.

10 months ago

giang nguyen senior

1. There are a lot of stable coins emerging such as USDC, TUSD ... But most prominent is still USDT with large trading volume, although recently there are many instabilities and the price of USDT is maintaining at the level low with 0.96 2. I think stable currencies will help people participate in the blockchain environment with greater confidence, their declining value will not be evaporated quickly. However, other projects are also affected, and the capital used for other projects will be less.

10 months ago

Fred Blauer guru

Open for business

I like maker DAI stable coin. I think that it has a lot of potential for the future, and I see it already being adopted in some dapps. This is the best article that I have read on the subject: https://media.consensys.net/the-state-of-stablecoins-2018-79ccb99... Although I think that the growing number of stable coins is a good thing for the industry, I think that most of them will not survive, since there are just too many. They are important for transactions where there is a time delay involved to reduce exchange risk. They can be a good hedge against volatility, and have other uses as well (as explained in the article). They will be important as long as we need to transition from fiat to crypto and back, which will be a very long time, and I think that we will see them being adopted more and more for certain use cases.

10 months ago

Panji Mustopa Part II new user

Professional ICO marketer

with the increasing number of funds, the more healthy the price movements of cryptocurrencies will be, even though it is not the main guarantee, but at least Stablecoin is a coin that has a clear collateral guarantee. I agree with some comments before my comment that USDT is most favorite stable coin for now

10 months ago

Even if in principle, it is obvious that stable currencies will allow some confidence in future investors. The fear of quickly losing its capital due to the fact of hypervolatility will be less present but on the other hand, the fact of controlling the cryptocurrency will he not to oppose their creation namely a citizen currency? The cryptocurrency market is not yet mature enough and used enough (very small proportion of the population is interested even if it evolves over time) so that it stabilizes itself? Today, I will be against stable currencies unless the cryptocurrency market can not stabilize itself and I think we could introduce them.

10 months ago

stable coin. maybe it could be like the success of USDT. this has been done a lot and not a few have failed. both by guaranteeing gold and others. this is a difficult job, when the coins are limited but the crypto market, which has a high level of fluctuation, will have an effect on the stable value of the coin. even though USDT seems successful but that is also not a guarantee the example in fiat is USD, EURO, TEN also depends on the economic strength of the government. I think creating a stable coin is heavy.

10 months ago

USDT as of now may lead the line and i think it's great to have stable coin as it brings complacence to people and the sense of connection between reality and virtual currency, but the real thing is USDT borrows its worth from USD so it isn't really stable at all. Also, the development of the project might be slowed down due to lesser opportunity of devs in terms of profit generation.

10 months ago

Sertan Ala guru

Which stable coin solution has the most promise for the future? USDT is the most promised stable coin solution for now. Because its already have got famous most of the traders are eager to using it. It will be top number 3 even the better competitors. What do you think the growing number of stable coin projects mean for the Cryptocurrency industry? I am not sure if we need that much amount of stable coin. Stable coin is a bridge between fiat and crypto money. For my thinking less is better. We can just have stable coins for other fiat money for example pound or euro.

10 months ago

"Stablecoins" are probably the dumbest thing that was spawned by crypto. Whatever you peg it on it will NEVER be stable. Currency can't have a stable value as it's always subject to the laws of supply and demand. Bitcoin is a perfectly working stablecoin, for instance. You don't even need to peg it to nothing. Its value is guaranteed by a HUGE network of users, some of who have invested HUGE quantities of money to keep the network secure by mining. Compare it to USDT whose value is guaranteed by a shady exchange. It's even worse than the real USD, which is at least guaranteed by the government, whatever that's worth. The irony shouldn't be lost on anybody. Crypto was made because the people who own the central bank do not have the general populations best interests at heart. Whole point of bitcoin is its stability, nobody can make more bitcoins out of thin air. If central bank can make as much USD as they feel like and lend it to banks who then buy bitcoin with them, the price of bitcoin is perfectly stable, only the USD is worth less.

10 months ago

A state-supported stablecoin is the future. For traders, stablecoin is very important because of the correlation of the tokens

10 months ago

Matan Argental

Live the moment, Think for generations.

Which stable coin solution has the most promise for the future? Maybe the word or mening of Stable Coin now regardes a serten categorie "backd by a phisical thing" , but i think it could be also backd by a wordley asset, that people agre that 0.00000001 crypto = is 0.00000001 real life money, That is the general idea, and i think that in the near future it will be more powefull then any gold or phisical metirial.

10 months ago

chev cheli0s new user

Marketing Expert & ICO/STO Advisor. Director of Strategic Partnerships @ SPARE

With the growing number of stable coins in the market, will come a great deal of market clutter, and projects that will become stagnant if their primary focus is on trading. Stable coins will need to expand its reach into other markets outside of exchanges to truly corner the market and compete with fiat currency, if that is in fact the end game.

10 months ago

Meisya Putri new user

I thought that USDT was the number one stable coin because they would always maintain the coin value by placing a stable value

10 months ago

As I would like to think stable coins are incredible. The make it conceivable to put your crypto assets on "stop" at whatever point there is a frenzy after a bull run. The favorable position is you don't have to trade out Fiat, with all the related issues of KYC and duties. (In any case, I am uncertain about whether you needn't bother with KYC for stablecoins) And if the best dump is over you can promptly reinvest in digital currencies once more. The main drawback with stablecoins I see, you don't have any certification, if there is extremely fundamental Fiat purchased when you purchase the stablecoin.

10 months ago

Dev Ranjan guru

Which stable coin solution has the most promise for the future? There are various stablecoins in Crypto Market now and new coins (projects) are becoming part of the market in every 1 to 2 months. But the most promising stablecoin according to me is 'USDT' Tether. Most crypto traders who are active on Bitfinx and Binance have heard of, and used, the USD-Tether. The mechanism behind Tether is straight forward: The Tether company creates one coin for every US Dollar it receives and locks away in its bank account. Thus, a one-to-one backing guarantees price stability against the dollar, because everyone already trusts the dollar. The Tether coin uses the Omni protocol to ride on top of the Bitcoin blockchain, guaranteeing secure transactions and transparency. In the new projects, I think Tiberius Coin (TCX) has a bright future. It is unique in the stablecoin space, as it is backed by not just one asset (like USD or silver), but by a combination of 7 precious metals: gold, platinum, tin, nickel, cobalt, aluminium, and copper. What do you think the growing number of stable coin projects mean for the Cryptocurrency industry? As I said there are vrious new stable coins in the market now and these are increasing in every 1 to 2 month(s). Fomous coins are nUSD, TCX, USDX, TrueUSD (TrueCoin) and GUSD (Gemini Dollar). A reliable stablecoin will enable greater use cases on the blockchain because it will allow people to transact in the short term with cryptocurrencies in a practical manner, while also providing the long term stability required for financial functions such as loans and credit. Distributed stablecoins could have the same advantages of Bitcoin, like being an electronic, censorship resistant payment method, without the same volatile exchange rates. Creating a stable, digital cryptocurrency is considered to be the highest convexity program in crypto because the total addressable market is all the money in the world, since it aims to be global, fiat free, digital cash. This makes the stablecoin addressable market much larger than Bitcoin itself.

10 months ago

If a stable coin is pegged to fiat, doesn't that kind of make it fiat though?

10 months ago

Dev Ranjan guru

Similar to fiat whis is in digital form and users has control on that. Central agency has not control on this that is a big plus point I think.

10 months ago

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Elric Drost guru

Creative session specialist, likes to go out of the box.. and beyond

For stable coins i don't think the problem is what you back them with. It's more about who is guaranteeing the backed value and how will you regulate these kind of coins. Who will check these kind of questions. For now i believe a stable coin can just print extra of it's coin and it just works as long as people believe that it holds that stable value. On the other hand, money used to be backed by gold. But in these days the backing of gold is not even close to the real value of the money out there. The advantage is that government issued fiat has way more trust than a stable coin made out of the blue. That makes the backing of these stablecoins more important. In the world of crypto it would be possible that everyone wants to sell the stablecoin at the same time because of trust issues that arrise. And if a large stable coin would not be able to pay it would be a disaster for the cryptoworld. The more stable coins pop up the higher the chance one of these coins is going to fail eventually. After all when you start out with backing with one gram of gold. Who would notice if you print some extra but don't buy any extra gold to back it up. Sounds tempting right? But what if the coin fails. And more interesting, how will this be handled by that company and how well was the backing they really had.

10 months ago

That's a good point. Some people believe cryptocurrencies are only so volatile bc of how young they are. With that perspective, as the market matures, maybe stable coins won't have a purpose anymore.

10 months ago

There is Digix Gold Token where 1 gram gold = 1 DGT . The difference in this project is DGT " Backed by 99.99% gold cast bars from London Bullion Market Association-approved refiners" according to https://digix.global website. This looks like a more secure way then others like tether but at the end of the day all coins/tokens relies to their creators.

10 months ago

It should be DGX not DGT .

10 months ago

TheCrypto .Tips guru

I do both things that measure our entire World => UX & TA

By market USDT is the bigger one which make it most promise but the trend is bearish, and many other like nUSD and TUSD came into this game, but in my opinion the next bullish trend can make any stable coin rise or fail. The growing number of stable coin projects can increase liquidity for buyers, sellers, and mostly the exchange platforms, which can help each side grow accordingly.

10 months ago

Which stable coin solution has the most promise for the future? I currently have no faith in any of the stable coins which are offered on the market today. The reason being that you'd have to trust the creators of the coin to 1. be able to actually back the token 1:1 with a Fiat currency. 2. To not alter the code in the contract at any point as a result of external forces (such as a government freezing the assets or a bank holding the reserve to go bankrupt). So we would need a stable coin that somehow solves the issues as stated above. My preference is to bypass any stable coin and swap Fiat to crypto immediately. What do you think the growing number of stable coin projects mean for the Cryptocurrency industry? It depends. If these stable coins are in fact guaranteed 1:1 backed to Fiat I consider this very important for the future and health of the ecosystem. The current market is relatively non-liquid due to a lack of easy on and off ramping of Fiat. Besides providing higher liquidity, stable coins will allow investors to more easily secure profits. And lastly, I hope that; if and when, we see more trusted stable coins enter the market, that we might see projects being able to move independently from btc. At the moment the market is at it's mercy, and this is unhealthy for crypto as a whole. This would be the same as if apple or amazon stock moved with the price of gold. This doesn't make any sense. However, if the market is flooded by stable coins, which turn out to be scams... I'm expecting a meltdown of the market. A Mt. Gox 2.0 if you will. So let's hope this isn't the case. PS: I've been using the bot on telegram for some time now, I like it. But I haven't yet dared relying on it to actually trade, but it gives a nice reflection of market sentiment. Cheers!

10 months ago

To your first point - That is a major concern for many people. However there are other solutions such as non-collateral to take the concern away from government freezing but yes trust is definitely a factor.

Your second point - It seems like stable coins may only serve the purpose of easily buying in and out of other cryptos. In that case, Fiat to crypto does make a lot more sense, and maybe the current regulation will make that more available to crypto.

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10 months ago

Which stable coin solution has the most promise for the future? I currently have no faith in any of the stable coins which are offered on the market today. The reason being that you'd have to trust the creators of the coin to 1. be able to actually back the token 1:1 with a Fiat currency. 2. To not alter the code in the contract at any point as a result of external forces (such as a government freezing the assets or a bank holding the reserve to go bankrupt). So we would need a stable coin that somehow solves the issues as stated above. My preference is to bypass any stable coin and swap Fiat to crypto immediately. What do you think the growing number of stable coin projects mean for the Cryptocurrency industry? It depends. If these stable coins are in fact guaranteed 1:1 backed to Fiat I consider this very important for the future and health of the ecosystem. The current market is relatively non-liquid due to a lack of easy on and off ramping of Fiat. Besides providing higher liquidity, stable coins will allow investors to more easily secure profits. And lastly, I hope that; if and when, we see more trusted stable coins enter the market, that we might see projects being able to move independently from btc. At the moment the market is at it's mercy, and this is unhealthy for crypto as a whole. This would be the same as if apple or amazon stock moved with the price of gold. This doesn't make any sense. However, if the market is flooded by stable coins, which turn out to be scams... I'm expecting a meltdown of the market. A Mt. Gox 2.0 if you will. So let's hope this isn't the case. PS: I've been using the bot on telegram for some time now, I like it. But I haven't yet dared relying on it to actually trade, but it gives a nice reflection of market sentiment. Cheers!

10 months ago

In my opinion stable coins are great. The make it possible to put your crypto funds on "pause" whenever there is a panic after a bull run. The advantage is you don't need to cash out in Fiat, with all the related problems of KYC and taxes. (But I am not sure whether you don't need KYC for stablecoins) And if the greatest dump is over you can immediately reinvest in cryptocurrencies again. The only downside with stablecoins I see, you don't have any guarantee, if there is really underlying Fiat bought when you buy the stablecoin.

10 months ago

Adam - Mn expert

It depends on what guarantees the stability of the coin. If we are talking about coins secured by the dollar (euro, etc.), I think that there is little point in them, not to mention increasing their number. Perhaps sooner or later there will be official (or issued by large banks) crypto-dollars and other currencies. For example, this opportunity is considered in Russia in relation to the ruble. If or when it will be implemented for the main world currencies, respectively, the need for stable coins provided by these currencies will disappear. Another thing when it comes to providing a more exotic pledge, such as lithium or real estate. In my opinion, this is interesting and has good prospects. As for the increase in the variety of coins in general, this can lead to the fact that for each case we will have a special cryptocurrency :)

10 months ago

good

6 months ago