It is abundantly clear that we live in an era where fiat currencies, digital currencies, and the internet are highly prevalent. No matter where you turn your head, these things will be right there in your face. But is that necessarily a bad thing? Absolutely not! If anything, it is a tremendous deal as the presence of these elements makes life remarkably swift and simple for everyone.
Sure there are detractors too, but as time passes, most of them will realize that online payments, whether through crypto or any other digital assets are the way to go. More than ten years later after bitcoin came to the forefront digital currencies reached a new unprecedented height that people did not expect them to achieve.
Crypto proliferated in more ways than one and ended up including stablecoins as well as digital currencies from the central bank. In most cases, regulators coming from different parts of the world show a great deal of concern regarding the incredible growth that crypto has seen over the years. It has been remarkably quick and remarkably high, so much so, that people new to it start having doubts.
Because of this, there has also been a lot of concern shared regarding the growth that stablecoins have experienced over the years. For those who do not know, stablecoins are quite unique in the sense that they are backed by the renowned technology known as the blockchain. That being said, people do tend to wonder if stablecoins are actually stable or if there is some volatility that holds them back from reaching the top heights of the crypto world.
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There are plenty of stablecoin types and each of them has something that makes them stand out. One of the biggest issuers of stablecoins happens to be Tether. During March, it came to be known that Tether held more than seventy-five percent of the reserves in the form of cash equivalents as well as cash. What’s more, a large number of these happened to be held in commercial paper form.
The rest of the assets tend to include loans or entities that happen to be unaffiliated, funds, precious metals, corporate bonds, and more. These also include extra investments that happen to include bitcoin along with a variety of digital tokens.
While there is nothing wrong with backing stablecoins, one thing remains certain – it requires a worldwide regulation framework. Introducing such a framework would be a step in the right direction, as it would help improve stablecoin’s trajectory.