Over the last few years, the world has witnessed some exceptional advancement in technology and innovations especially in digital transactions. With the advent of cryptocurrency and the world’s focus on Bitcoins, a new competitor ‘Stablecoin’ slowly crept its way into the limelight.
Stablecoins primarily emerged in the year 2018 with a motive of safeguarding its users from the high volatility that came along with Crypto which later extended to the promise of boosting cross-border payments and remittance. Today it has become the focal point of discussion of more than a few international bodies including the Financial Standards Board (FSB), G20, Financial Action Task Force (FATF), and International Organization of Securities Commission (IOSCO).
Additionally, it came into light as an effective solution to the emerging notion for cross-border payments and remittances during the ongoing COVID-crisis. This resulted as a defining moment for stable coins to prove its ability and had drawn all the more attention towards the need of establishing regulations and legal framework concerning Stablecoins.
This article goes deep into an insight into Stablecoins, its uses, and how the ongoing COVID crisis may act as a catalyst for its rise.
Stablecoin is a division under the wide umbrella of the cryptocurrency. Stablecoins are anticipated to be more capable of serving as a mode of payment and store of value, and they could potentially add to the development of global payment arrangements that are faster, cheaper, and more comprehensive than present arrangements.
With the introduction of Stable coins in the year 2018, there was a wave of stability amongst the cryptocurrencies. Many businesses preferred it as a regular means of payment, as effortlessly as fiat, and eventually, it was used to bridge the gap between fiat and cryptos.
How Stablecoins Are Used?
The foremost use of Stablecoins is to quickly switch between a volatile cryptocurrency. It is used particularly while trading to guard the value of holdings.
Stablecoins are designed specifically with an intention to be used as a mode of payment in the future. Quoting Lael Brainard, an American economist and member of the U.S. Federal Reserve’s Board of Governors, said last year, “Stablecoins aspire to achieve the functions of traditional money without relying on confidence in an issuer—such as a central bank—to stand behind the money.”
Stablecoins is a great alternative that can be used for smart financial contracts that are enforceable in the least turnaround time. Smart contracts are ones that exist on blockchain technology and are self-executing contracts hence it doesn’t require any third party or central authority’s involvement. Such routine transactions are transparent, traceable, and irreversible, making them perfect for salary and loan payments, rent payments, and subscriptions. For example, a business can initiate a smart contract that repeatedly transfers stablecoins to its employees’ accounts at the end of each month.
Some popular Stablecoins used worldwide are:
Gemini Dollar (GUSD)
Paxos Standard (PAX)
Impact Of Stable Coins Globally
The eCommerce market is witnessing a great transformation due to the emergence of stable coins that incorporate appropriate technology, consumer demand, and corporate champions in its right place. With a willing regulatory environment materialized in the next few years, it is sure that the adoption of stablecoins as a mode of payment might boost acceptance of Blockchain technologies above and beyond the current niche uses and has the prospective to breach the barriers to entry in the e-commerce market.
It is an effective option that exhibits a stable value through algorithmic money or collateralized stablecoins. The finance industry all over the world has witnessed the potential Stablecoins have emerged with and are incorporating it as a feasible model to hedge against market movements and have verified different levels of price volatility depending on their business models. The future of Stable coins is envisioned as an alternative to e-money under some national legislation.
With the emergence of stablecoins and altcoins, many online payment platforms have shown great support for the dealings of cryptocurrencies. One such is Payscript. Its online platform has been designed extensively as a payment gateway that helps its users in making cryptocurrency payments and transactions effortless.
We operate with an aim at bridging the gap between the merchants accepting cryptocurrencies and crypto coins to the owners of cryptocurrencies and crypto coins. Payscript offers solicitous benefits and perks to both its merchants and its owners.
So if you are looking for a professional and responsible platform to deal with your crypto transactions then Payscript is definitely your one-stop solution.