The Future of Cryptocurrency
Navigasi - Sean Stein Smith, professor at City University of New York-Lehman College in his opinion on Forbes last year said stablecoins are considered the future of crypto.
|The Future of Cryptocurrency|
Stablecoins are backed cryptocurrencies, augmented by the underlying asset. Stablecoins can be linked to official currencies such as the US dollar, Euro, or Pound sterling in order to stabilize the price, reported CNBC Indonesia.
An example of an adaptation has been made by Visa Inc linking it to the US dollar or USDC, which is a cryptocurrency. One of the reasons stablecoins were able to overtake Bitcoin, the dominant cryptocurrency today, is its low volatility.
Stablecoins have the primary benefit of continuing to attract interest for individuals and institutions. Exchange rate stability is useful for holders or those integrating Bitcoin with other cryptocurrencies in the wider financial system.
Smith also described Bitcoin in the future. According to him, the crypto will not be a means of payment but an investment tool that is leading in market capitalization and a creator of investor awareness.
It is not known whether this image is still happening. Because a year later, stablecoins actually made many investors dizzy. This happened when the prices of TerraUSD (UST) and Terra LUNA fell some time ago
UST uses an algorithm-based stablecoin mechanism. Tokocrypto trader Afid Sugiono said that the weakness of this mechanism was that the LUNA price was greatly affected during the dynamic decline in UST.
However, not all stablecoins use algorithmic mechanisms. Other tokens use fiat currency and there are also those that peg their value with a guarantee of ownership or certain commodities.
Some of the stablecoins with the largest market caps are Tether (USDT) and USD Coin (USDC). Meanwhile in Indonesia there is Binance IDR which pegs it to rupiah.