The positive impact of stable coin in the cryptocurrency market. | 10% for @tron-fan-club
Mitigation of Volatility:
The volatility is the major problem associated with many of Cryptocurrency based projects. That's why reputed investors and businesses are not interested in cryptocurrency because of the price volatility in the market. Stable coin are the coins which are mitigating this gap of cryptocurrency volatility with the Fiat currency.
The stable coin will be issued according to the backup of Fiat currency like USD when it is fiat currency based stable coin. In that way the price volatility will be mitigated because when there will be shortage of this stablecoin then it will be supplied with USD and when there is excess of stablecoin it will be replaced by USD very easily at once. So if the price volatility of Fiat is constant or reduced then in that way volatility of the stable coin will be in the same pattern. In this way the volatility is mitigated in this stable coin system. The primary objective of stablecoins is to provide a stable unit of value in the cryptocurrency.
Facilitation of Transactions:
Stablecoins offer a convenient means of conducting transactions within the cryptocurrency network. The time of occuring the transaction is very low and the
payment will be very smooth in this process of transaction with stable coin. This increased the
practicality of using cryptocurrencies for daily purchases and payments.
Entry Point for New Users:
The stability of stablecoins makes them an attractive coin for new users unfamiliar with the cryptocurrency. New users can be motivated and interested enough to start acquiring stable coin. These People can be trader for other cryptocurrencies when desired. Arbitrage
Opportunities:
Traders and investors could exploit arbitrage opportunities between
exchanges by using stablecoins as a stable intermediary.
Regulation:
There is a problem with cryptocurrency regulations as it is sometimes treated as asset and sometimes currency. Legal tender is not possible all the time in many of the countries due to the restrictions by the government or Central Bank but there is no such a problems with the regulations in case of stable coin as it is made by Fiat currency of the native fiat or any other foreign currency for any specific country. So there is no problem with regulations for stable coin.
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Good to see positive news. It had been going through the negative for several days. I enjoyed reading your post.
The positive impact of stable coin in the cryptocurrency market is a great article.