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Stablecoins Continue to Make impact As Businesses Explore Crypto integrations - Crypto-News.net
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As platform development rapidly accelerates, stablecoins continue to occupy a unique place within the blockchain space. These digital currencies, which are backed by hard assets, are widely derided by crypto purists. Nevertheless, as a means of storing and transferring wealth their popularity is growing rapidly. Now a number of recent moves indicates that they are becoming legitimate competitors to standard cryptocurrencies.

Most stablecoins are anchored to either a strong fiat or gold. As such, their owners cannot expect to enjoy quick profits if their popularity grows. This fact also ensures that these digital currencies remain immune from the price volatility that is endemic to the crypto market. One key advantage of stablecoins is that there is no financial incentive to hold them, and thus they are far more likely to be spent by their owners. A wide range of financial institutions are taking notice, even those that focus on the crypto space. For example, payment processor Bitpay has begun to integrate stablecoins into its service offerings. Stablecoins are also increasingly available at crypto ATMs, and a number of remissions-based services have begun to embrace them.

There appears to be a growing acceptance of stablecoins from businesses and retailers, who wish to embrace cryptocurrency yet recognize that their customers remain tied to fiat. Booking.com now accepts Tether, as does adult video site PornHub. The later has embraced Tether as a result of a ban by PayPal, thus demonstrating the advantages offered by decentralized currencies. The legacy financial space, which thus far has largely shunned blockchain assets, is beginning to warm to the idea of stablecoins, primarily because these digital assets are much more capable of integration into current economic frameworks. A number of economists have recently begun to speak positively of their potential to eliminate friction in areas such as international transfers, as well as their ability to securely store value, much as precious metals have done for centuries.

As is the case with standard cryptocurrencies, stablecoins are presently unregulated. Many are centrally controlled, and most have yet to prove the existence of their backing funds via independent audit. These shortcomings introduce very real risk to investors. Notably, Tether, the most popular, is extremely secretive about its secured assets, and is presently the subject of multiple class action lawsuits over this issue. Long-term success of stablecoins will certainly require legal recognition, along with regulations designed to protect investors and prevent fraud. Nevertheless, such moves also draw the ire of many crypto advocates, who assert that regulating digital currency could quickly lead to censorship and government overreach. This is the same criticism leveled at central bank digital currencies (CBDCs) as well as the current electronic banking system.

The growing popularity of these unconventional digital assets demonstrates the tremendous diversity of the crypto space. There is no single platform that can presently claim superiority, and promoters of stablecoins as well as those of conventional cryptocurrencies both have valid arguments to support their positions. Moving forward consumer behavior and the free market will ultimately decide their fate.

 

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