Stable coins are cryptocurrencies that are linked to assets such as US dollars and it’s value does not necessarily change. Despite majority of this stable coins using dollar as their major asset, there exist some that are attached to other fiat currencies issued by government like Euro and Yen. These stable coins help to manage volatility in the cryptocurrency markets.
What are Stable Coins?
Stable coins are cryptocurrencies whose price is designed to be attached to a cryptocurrency, fiat money or to exchange traded commodities such as precious metals. They are designed to maintain a fixed value that is affected by any change or occurence of any kind.
What are The Examples of Stable Coins?
There are many different kinds of stablecoins, differentiated primarily by the asset that backs them. Here are the major types:
- Commodity Backed Stablecoins
- Fiat Backed Stablecoins
- Crypto Backed Stablecoins
How to Buy Stable Coins
Cryptocurrency purchase can be frustrating at times because no one wants to lose money on a scam or pay too much in fees. Here’s how you can buy stablecoins securely and without unnecessary extra costs.
1. Decide which Stablecoin you want to Buy
Start by deciding the type of stablecoin you want. Most people follow the U.S. dollar, but there are other stablecoins tied to different assets, such as gold or even other. If you already have an account on a crypto exchange, see which stablecoins it offers.
2. Pick a secure Crypto Exchange
After choosing a stable coin of your choice, the next step is to find an exchange that sells the stablecoin you want. This is what you should do if you’re interested in purchasing a particular stablecoin.
3. Make an Account
Sign up with the crypto exchange of your chose. The exact registration process depends on the exchange, but it’s usually straightforward. You will be required to provide some information to create an account:
4. Deposit Money
Deposit money into your exchange account so you can buy crypto. The recommended way to do this is through a transfer from your bank account, you have to connect your bank account to the crypto exchange.
5. Buy the Stablecoin
The next step is to buy the stable coin of your choice. After clicking the buy order, there will be a transaction preview to show you the fees, total cost, and how much of the stablecoin you’ll receive. When you’re ready, confirm the purchase.
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Top and Upcoming Stable coins
Some of the best Stable Coins available for one to purchase and keep are :
- Tether (USDT)
Tether is a peer-to-peer blockchain and open-source cryptocurrency which is one of the most secure stablecoin whose value is attached to the US dollar. In simple terms, a U.S Tether token is $1 all time. Tether combines both the power of science and academia. Hence, it is not majorly affected by market fluctuations. Further, it is one of the popular stablecoins and is also very helpful for transactions that often face difficulty when exchanging money into USD.
- True USD (TUSD)
This is the first regulated stablecoin backed by the US Dollar. It is known for its simplicity, transparency, and reliability as it doesn’t use any special algorithm.
True USD is one of the best staking stablecoins that can connect with the next generation and be held for a long period of time. It was introduced to hedge against market volatility and create new opportunities for people to invest in True USD rather than Bitcoin or Ethereum.
- USD Coin (USDC)
One more best stablecoin to use is USD Coin. It is backed by real-world assets and initially operated only on the Ethereum blockchain. However, it has now expanded to Solana and Algorand blockchains. Why USD Coin is so special is because, it has better transparent funding and auditing processes. It also offers high speed and reliability.
- Binance USD (BUSD)
One more U.S regulated stablecoin is Binance USD. Fully backed by U.S dollars, Binance USD ensures faster ways to fund your transactions and can be used as a medium of exchange. Further, you can even use it as a method of payment in the global crypto space.
- Paxos Standard (PAX)
This is one of the best stablecoins to hold as it integrates US Dollar stability to the efficiency of blockchain technology. PAX is programmable and can be moved anywhere in the world, instantaneously, anytime. It is issued by the Paxos Trust Company. Hence, rest assured, your funds are safe, audited, and regulated.
Stablecoins are cryptocurrencies that are not influenced or affected by any changes and if you have the intention of buying a coin that will not fluctuate, it is the best coin you can pick. We hope this article has given you an indepth knowledge of stable coins, how to purchase it and the best possible ones you can invest in. Kindly drop your views in the comment section.