Digital currency are digital formats of currencies that do not exist in physical form. It is also called digital money, electronic money, electronic currency, or cybercash.
After the 2023 dark clouds, a silver lining finally manifested in the Crypto world. The Cryptocurrency market blazed into 2024, riding high on the waves with unprecedented momentum. 2024 marks a poignant chapter in the Crypto space with woven highs, anticipation and an endless innovation…
In a recent development, a group of US senators has positioned themselves to squarely reject the Biden administration’s ambition to introduce a central bank digital currency (CBDC). In this case, a digital version of the US dollar. This move holds particular interest for UK citizens…
Providing stability in an otherwise volatile market, the dynamic nature of the crypto world has emerged as a pivotal instrument for Stablecoins. But one question remains: Will 2024 be the Year of Stablecoins? Given the volatile nature, Web3 technology is changing how we handle assets by…
From the exchange of seashells to gold coins and now to digital tokens, money has constantly evolved to meet the needs of society. One of these revolutionary strides is the invention of cryptocurrencies, kickstarted by Satoshi Nakamoto’s Bitcoin in 2008. Bitcoin, the world’s pioneering…
Date: February 3, 2024 UTC Excitement builds as SpaceX Falcon 9 to soar with DOGE-1 on board. Venue: Kennedy Space Center, Florida, USA In a historic moment for the world of space exploration and cryptocurrency, a SpaceX Falcon 9 Block 5 rocket is set to…
As we journey through 2024, Dogecoin seems to be gearing up for some noteworthy price gains in the coming times. This meme-inspired cryptocurrency has reached notable milestones, like surpassing five million addresses holding a balance. Additionally, there was a considerable uptick in transactions in December. These…
UK lawmakers urge the government to consider reducing holding limits for the upcoming digital pound. They also emphasize ensuring its design allows the possibility of earning interest. These considerations reflect the focus on Digital Pound Holding Thresholds and how they impact financial dynamics. Debates…
Your day-to-day spending could take a different turn once the digital pound comes into play. Your online-store shopping experience could be more seamless thanks to this new piece of technology by the UK government. The central bank digital currency (CBDC) has slowly made headlines…
In early October, a federal judge essentially slammed the door on the U.S. Securities and Exchange Commission’s hopes to appeal her recent verdict in the Ripple Labs case. This judgment is widely regarded as a significant setback for the regulatory body’s mission to keep a…
Apparently, China is developing two projects intending to digitize key parts of its economy. If successful, this may have further implications beyond its borders. Often convoluted, the Digital Yuan, better known as e-CNY and the BSN is district technology and its success is unpredictable….
A Stablecoin is a cryptocurrency whose value is pegged to an external asset, such as fiat currency or gold, to maintain a stable value. Some cryptocurrencies offer several benefits; the most notable is that they do not require a central authority to process transactions, thereby enabling their use worldwide. However, crypto’s crucial debit is that crypto prices fluctuate frequently.
Therefore, these assets are complex for the public to use. Typically, people want to know how much money they have to make financial decisions. The inherently unpredictable nature of crypto contrasts with the price stability enjoyed by money. The value of currency, e.g., the U.S. dollar, is also affected by changes in value, but to a lesser extent than cryptocurrencies.
Stablecoins aim to mitigate value fluctuations by pegging crypto to a stable external reference – typically fiat currencies. Fiat is a currency issued by the government and used in daily transactions. Examples include the United States dollar ($), the pound sterling (£), and the Euro (€).
Generally, the reality propelling Stablecoin will comprise a” reserve “where it steadily stores the asset or basket of means supporting Stablecoin. They are pegged to tangible – world assets. Whenever a Stablecoin holder withdraws their assets, the total value of the withdrawal is subtracted from the standby cash reserve.
An intricate type of Stablecoin is collateralised with cryptocurrencies other than fiat currencies, yet it is still designed to track a conventional asset.
Maker is a renowned Stablecoin supplier that uses this medium and achieves this milestone using the “Vault, which locks up a holder’s crypto security. As soon as the intelligent contract proves that the guarantee is in place, the contract makes the holder eligible for a DAI loan.
Algorithmic Stablecoins are another class of Stablecoins. It is not collateralised. They are either burned or minted to preserve the coin’s value.
Finally, there are some drawbacks to Stablecoins, mainly due to their typical structure. Hence, it presents distinct challenges compared with other cryptocurrencies.
Cryptocurrency was designed to replace third-party firms that manage users’ funds. These third-party firms can block certain transactions. However, some Stablecoins can also block certain transactions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
