Besides the increase in the number of cryptocurrencies, the crypto coins have also diversified. Now, the market has Stablecoins as alternatives to the highly volatile cryptocurrencies. If this is your first time hearing about Stablecoins, these are cryptocurrencies pegged to other assets.
Since they broke into the crypto scene in 2014, Stablecoins have quickly become a great option for people and investors looking for some sense of stability in the crypto market. The four main categories of Stablecoins you will find out there include; fiat-backed stable coins, commodity-backed stablecoins, cryptocurrency-backed stablecoins, and seignorage-style stablecoins.
In this article, we delve into the benefits of stablecoins and how stablecoins can enable you to protect your wealth during the next economic crisis.
Benefits of Stablecoins
Borderless: Because they are available through a decentralized blockchain, which is available through the internet, they are easily accessible anywhere in the world where there is internet connectivity. Anyone can own and transact the digital coins 24/7–365.
Safety during volatility: It is common knowledge that the crypto-verse is highly volatile, which makes it a highly risky investment option. However, Stablecoins provide a safety net during volatile times in the market. You no longer have to worry about sudden coin price depreciation when utilizing stablecoins.
Programmable: Change is inevitable, and with time there is always a need for change to adapt to every new standard. Because Stablecoins are built on blockchains with the ability to edit, it is easy to add features to them when there is a need for some change.
Note that because Stablecoins are available through blockchain, you also enjoy immutability, transparency, high-tech security, and fast transaction speeds, among other benefit.
How to protect your wealth using Stablecoins
The all-time benefit that comes with Stablecoins is protecting your wealth in times of economic hardships.
With these asset-backed cryptocurrencies, you can easily move your wealth and savings to the digital space for safekeeping. And, because they are available through blockchain, you can easily access them through your phone or computer from anywhere across the globe. Of course, as long as you have access to the internet.
What’s more, with Stablecoins you don’t have to worry about issues like inflation affecting your wealth and savings.
Over the years, inflation has been the reason why several countries’ economies have crumbled and some continue to crumble.
To date, the situation seems not to have changed much for citizens in these nations. Some of the problems these people face include a shortage of goods and services, reduction in the value of savings, and fall in real wages.
Inflation also results in an uncompetitive economy and discourages investment and long-term economic growth.
Taking Venezuela as an example, the once oil-rich nation started experiencing inflation way back in 2013 with the rise to power of Nicolus Maduro.
By 2014 the inflation rates in the country had reached 69% the highest in the world. In 2015 the inflation rate was at 181% again the highest in the world, and by 2016 it was at 800%.
By 2017 the inflation rate in the country exceeded 50% per month, which had now pushed the country into hyperinflation, and the country’s national currency (Bolivar) eventually became worthless.
Consequently, foreign currency has become the only practical means of trade in the country as most businesses require payment in Colombian, Brazilian, US, or European currency.
The crisis in the country has resulted in close to 4 million people (a tenth of the country’s population) fleeing the country. This is the largest human displacement in Latin America.
Note that Venezuela is not the first country to experience such levels of hyperinflation. Inflation dates back to 1913 and 1919 during WW1 when it was quite rampant.
As you can see, inflation has been a problem in the past, current times, and it’s likely to be in the near future. However, there is a solution.
Stablecoins offer people struggling under distressed economies away to protect their wealth and not suffer at the hands of inflation.
With platforms like Stably you have the option to transfer your wealth to fiat-backed cryptocurrencies like Stably USD and access it from anywhere across the globe.
How Stably’s Stablecoin (Stably USD) can help
Stably USD’s major use case is to help you preserve your wealth during periods of market volatility as well as help bridge the gap between fiat and the blockchain economy.
Created by Stably a venture capital funded-startup, StablyUSD is fully backed 1:1 to the US dollar. Each Stably USD is worth 1 US dollar. There are plans to also back the coins with other currencies like Pounds, Euros, Yens, Lonnie, and Sing.
The Stablecoin is designed to work across multiple blockchain protocols that include Ethereum, Binance Chain and eventually Stellar. Just like many other cryptocurrencies, it is available anywhere across the globe where there is internet connectivity.
With StablyUSD you have a way to beat inflation and other types of economic crisis any time they occur without breaking a sweat. The value of your wealth is always intact regardless of the economic situation of your local currency.
Over to you!
An economic crisis comes with dire consequences that can negatively impact many people’s lives, not just their wealth. Do you think stablecoins are a viable solution? Share your thoughts in the comment section below.
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