Stablecoins are a type of cryptocurrency designed to maintain a relatively stable value, often by pegging their value to a stable asset such as traditional fiat currencies (like the US dollar or the euro) or commodities (like gold). They aim to combine the stability of traditional currencies with the benefits of cryptocurrencies.
How to benefit from stablecoins:
* Means of payment: Due to their stable value, stablecoins can be used in everyday transactions online or between individuals without exposure to the significant price volatility seen in other cryptocurrencies.
* International money transfers: Stablecoins facilitate cross-border money transfers at lower costs and faster speeds compared to traditional banking systems.
* Hedging against cryptocurrency volatility: Traders and investors in the cryptocurrency market use them as a safe and stable asset to temporarily hold the value of their assets and avoid losses resulting from sharp price fluctuations.
* Access to decentralized financial (DeFi) services: Stablecoins are essential in many DeFi applications, such as lending, borrowing, and providing liquidity in decentralized exchanges, where they provide the necessary stability for these operations.