1. For Trading
The base stablecoins for trading are the pres like #USDT🔥🔥🔥 #USDC✅ and #BUSD are used as base pairs to trade with other cryptocurrencies, allowing you to enter and exit positions in other cryptocurrencies without having to convert your funds to traditional fiat currencies.
Protection against times of high volatility in the market by converting your assets to stablecoins, preserving their value, and avoiding losses.
They allow you to take advantage of good buying opportunities at low prices using your stablecoins to execute the operation quickly.
2 For Earning Returns (Binance Earn)
Binance offers several options within its "Earn" platform for you to earn returns with your stablecoins.
You deposit your stablecoins and earn daily interest. The advantage is that you can withdraw your funds at any time. Interest rates are usually lower than other options, but they offer immediate liquidity.
You lock your stablecoins for a specified period and receive higher interest rates in exchange for not being able to access your funds during that time.
Although less common for stablecoins directly, some DeFi platforms integrated into Binance may offer staking opportunities with stablecoins in exchange for rewards.
You can provide liquidity to trading pools that include stablecoins and earn commissions on the transactions that occur in that pool.
A more complex product where you can deposit your stablecoins and bet on the price direction of another asset to potentially earn higher returns.
3 For Payments and Transfers
Binance has its own cryptocurrency payment system called Binance Pay. You can use your stablecoins to send money to other Binance users or to merchants that accept Binance Pay, often without fees.
You can withdraw your stablecoins to other wallets or exchanges if you need to use them elsewhere.
4 As a Store of Value
Due to their peg to fiat currencies like the US dollar, stablecoins are often used as a way to maintain value within the crypto ecosystem without the volatility of other cryptocurrencies.
Important Considerations
Although they are more stable than other cryptocurrencies, stablecoins are not without risks. It is important to research the stablecoin you use to understand how it maintains its parity and what its reserves are.
Regulations regarding stablecoins are evolving in different regions, which could affect their availability or use on Binance. For example, in the European Union, due to the new MiCA regulation, Binance has had to remove some non-compliant stablecoins for trading, although deposits and withdrawals are still allowed.
