For the last several months, stablecoins are referred to as one of the most dominating trends in 2019. The national cryptocurrencies are next to this phenomenon and are also widely discussed. It is quite understandable — up to date, the most popular and successful stablecoins are backed with fiat currency like US dollars. In addition to any fiat backed stablecoin, there are tokens which are secured by other assets, including stocks, metals, oil, diamonds; stablecoin backed by gold and even other cryptocurrencies. However, many crypto market participants raise different questions such as whether the stablecoins could be considered as a cryptocurrency at all, or is there a need for these assets, or what would be the future of the market with their development?
Background of the phenomenon and its usefulness
Many market players were envious about the increasing demand for the USDT token, so the followers entered the game, and the phenomenon started reaching momentum. To date, the number of stablecoins on the market has exceeded one hundred. If you would like to find out what sort of projects there are, you can watch the entire stablecoin list with a portion of comments on the Stable Report website.
Is it the infamous road paved with good intentions?
The head of BitPay, Stephen PAIR, expressed the opinion that DLT technologies will be fundamental for making all payments on the 3-5 years horizon. However, he stressed that this is not about the cryptocurrencies, but the digitized dollars and euros. Such situation twist may lead to the fact that the original cryptocurrencies will be excluded from circulation at all.
What to expect from stablecoins in the nearest future
The Morgan Stanley made a report on the market development with the prediction that bitcoin trade is moving in the direction of increasing influence of the US dollar-backed stablecoins and this trend would have a tangible impact.
Lucius MEISSER, the pioneer of blockchain development in Switzerland, believes that the market can be triggered exactly by the stablecoins and tokens with the official status of shares. This will provide investors with the real rights, not just the opportunity to be a part of a crowdfunding campaign, says FxPro analyst Alexander KUPTSIKEVICH, adding that “the new stablecoins considered the mistakes of the original USDT and currently demonstrate the readiness for transparent business. <...> New projects may arise precisely on the basis of tokens with stable prices and guarantees of the rights for all participants.”
Those crypto enthusiasts who don’t express skepticism, believe that stablecoins entered the market for quite a long period. They are said to become a useful instrument for conducting real estate or securities transactions: the price of a stablecoin won’t fluctuate much and partly guarantees the absence of unpleasant surprises.
Image courtesy of Bitcoinist