What are stablecoins

Stablecoins have their market value pegged to an external reference like gold or the US dollar. Such external references are referred to as reverse assets. In short, these coins exists to offer an alternative to highly volatile cryptocurrencies like Bitcoin. Thus, the presence of stablecoins has attracted more people into the crypto world. 

Stablecoin definition

Stablecoin is a cryptocurrency with a more stable value compared to other cryptocurrencies. What distinguishes a stablecoin from other cryptocurrencies is the attachment to an external asset. 

The link to an external asset not only stabilizes these coins but also forms the basis for its value. Typically, a stablecoin reflects a fixed-price cryptocurrency. It is built to offer stability. It, therefore, means that stablecoins do not fluctuate in value. 

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How many stablecoins are there

There are over 200 stablecoin varieties. Each of the existing coin is tied to a unique asset or network. However, all the stablecoins are characterized by the stability of prices. 

Nowadays, the majority of people rely on fixed-price cryptocurrency as a store of value. Globally, among the largest stablecoins include; Tether (USDT), USD Coin (USDC), and Binance USD (BUSD)  – These three stable coins have a market value ranging from $78.6, $49.9 and$17.2 billion respectively. 

The list of stable cryptocurrencies 2022 looks as follows: –

  • Tether (USDT)
  • Dai (DAI)
  • Binance USD (BUSD)
  • USD Coin (USDC)
  • TrueUSD (TUSD)
  • Pax Dollar (USDP)
  • Neutrino USD (USDN)
  • Fei USD (FEI)
  • Gemini Dollar (GUSD)
  • Tribe (TRIBE)
  • USDX [Kava] (USDX)
  • Vai (VAI)
  • Full list of stablecoins

Value of stablecoins

Can stablecoin increase in value? This is a common question in the world of cryptocurrency and blockchain. According to CoinMarketCap, all stablecoins add up to a market value of $163 billion. As mentioned earlier, each coin holds a fixed value against an external asset. For instance, the largest stablecoin -Tether- holds an equivalent value of $1 per USDT.

Many stablecoins are pegged at a high of $1.02 to a low of 97 cents or $0.97. Some go as low as 95 cents or $0.95. Since they are attached to mainstream assets, fixed-price cryptocurrencies are used as the main medium of fiat-cryptocurrency exchanges. 

Theoretically, one stablecoin is equivalent to one dollar ($1).

Interest rate

Investing in stable assets could mark a profitable move due to great interest rates. It is worth noting that stablecoins have been embraced as niche currencies in the world of cryptocurrency. Therefore, investors can transform their assets into ‘real’ money and vice versa. 

Turning to interest rate, stablecoin’s annual percentage yield (APY) stands at 12%. The platform that offers the best stablecoin interest rate is known as Aqru. 

Where to buy stablecoins

In a bid to temper the high volatility in the cryptocurrency portfolio, acquiring top coins that are regarded as stable is worth it. All you need is a wallet to store your coin. You can purchase at Binance, Kraken or Coinbase, to say the least. 

Stablecoins on binance

Does Binance have stablecoin? YES. Binance is the largest crypto exchange in the world. Thus, the top stablecoins on Binance include; USDT, USDC, BUSD, DAI, FRAX, UST, TUSD, USDP, LUSD, and FEI. This particular list forms the best stablecoins in the world. However, Tether remains the most popular stablecoin globally. BUSD is issued by Binance – A crypto exchange platform considered for advanced transactions. 

Stablecoins on coinbase 

Coinbase allows for the exchange of cryptocurrency. Essentially, coinbase users can buy, sell, send or receive cryptocurrency via mobile or web browser. Coinbase is U.S-regulated. Just like in binance exchange, top stablecoins can be found on coinbase; Tether and USD Coins. At coinbase, USD Coins are redeemable for US$1. This is an all-time stable price. Coinbase also offers rewards for holding such coins.

When to buy stablecoins

Generally, all stablecoins function the same. You can store stablecoins in a hot wallet or a cold storage device. When to buy stablecoins: –

  • Buy stablecoins when you intend to store value. 
  • Buy stablecoin when converting digital assets to real money.
  • Buy stablecoins for trading on an exchange.
  • Buy stablecoins for investing.
  • Buy stablecoins for lending.

Types of stablecoins

The world is getting to know stablecoins really fast. The attention of stablecoins extends beyond the crypto community and market investors. Although there are attempts and prospects of leveraging stablecoins, knowledge pertaining to the different types of stablecoins is necessary. There are four main types of stablecoins: –

  • Fiat-backed, 
  • Crypto-backed, 
  • Commodity-backed, and 
  • Algorithmic.

All the above are identified according to the underlying collateral structure. In other words, each category hints at the asset backing them. 


The phase of stablecoin regulation is yet to kick off. When that time comes, regulation could birth the first set of rules in the crypto sector. But again, these are virtual assets and could be regulated differently. Meaning that regulations for Tether (USDT) will be different from those associated with USD Coins (USDC). 

In sum, stablecoins are a crypto and blockchain game-changer because of bridging the gap between cryptocurrency and fiat. Stablecoins tend to present the safest cryptocurrency alternative as they are not subject to volatility.