What are the advantages of using stablecoins?

The appearance of Bitcoin in 2009 brought a completely different perspective to the financial market. Since then, hundreds of new crypto-currencies have been created. Among these virtual currencies are stablecoins. What are the advantages of using stablecoins? Find out in this article.

Offer ease of use in the world of trading

To fully understand the benefits of using stablecoins, it is important that you know the Stablecoin Definition. Still referred to as stable currencies, stablecoins are digital assets that aim to ensure exchange rate stability in the crypto-currency market.

Stablecoins use various mechanisms to ensure that their price is stable relative to the reference asset. Some of them eliminate the price volatility of other crypto-currencies. This keeps the crypto value of stablecoin users constant and predictable, without the need for currencies such as the dollar or euro.

Secondly, the digital and decentralised nature of blockchain allows stablecoins to be highly mobile and easy to exchange. This is evidenced by the fact that stablecoins allow the transfer of value without geographical boundaries, at any time of the day. These transfers are made with low fees, operating in secure, private and censorship-resistant networks.

At the heart of the cryptocurrency ecosystem, stablecoins are very useful for those who trade, as they provide protection from sudden price changes to choose the best possible buying times.

Stablecoins are very economical

In times of falling markets, transferring crypto funds to stablecoins allows one to protect oneself from falls and then repurchase the asset at a lower price or reconfigure the entire crypto portfolio. As a result, the low volatility helps to offset the movements of other virtual currencies.

In the retail payments market, stablecoin-based solutions aim to address changing consumer preferences for instant, continuous or standardised payments. This will increasingly drive consumer growth. You may have noticed that the current offer of electronic payment means does not have a universal and user-friendly cross-border solution similar to cash payments. This is not the case with Stablecoins. Stablecoins could therefore be considered as a universal means of payment facilitating cross-border payments in a single unit of account.