What is a stablecoin? I feel so confused. Recently, there's been an overwhelming amount of information, as if another opportunity to get rich has come, and those who missed out on Bitcoin have a chance this time, right?
I never understood Bitcoin until now, and I'm slowly starting to grasp a bit. Why has Bitcoin risen so much? I think there are two fundamental reasons: one is that the supply is limited; the total amount of Bitcoin is capped, and it's hard to mine more. The second is that Bitcoin has its actual use, especially in some illegal transactions. Due to the high demand for illegal transactions and the limited supply of Bitcoin, its price must rise. The increase in Bitcoin's price inflates its total value to meet the demand for illegal transactions and the accompanying need to preserve wealth.
So, do stablecoins meet these two conditions? First, how is the issuance authority and volume of stablecoins determined? Is it highly restricted, or can the supply be increased as needed? I haven't researched information about stablecoins, but from common sense, since it is officially decided and not algorithmically locked like Bitcoin, it is likely that they can be issued as needed.
How are stablecoins used? Are there any special scenarios where stablecoins must be used for settlement? Currently, whether for daily transactions or international trade and investment, using fiat currency is quite convenient, unless it's for illegal transactions.
So, for now, I still don't understand why the authorities would be excited about increasing the money supply.
