Category: 2. What is a Stablecoin?

Stablecoins are arguably the fastest-growing type of cryptocurrency today. In 2020 alone, the supply of stablecoins has jumped from $5 billion to $23 billion. Without this much needed degree of price stability, cryptocurrencies would be hard-pressed to offer more complex financial instruments, such as loans, derivative contracts, or insurance – and thus to become part… Continue reading A stable future

As cryptocurrencies prove themselves a viable and efficient alternative to current payment systems, winning over ever more sectors of the economy, it’s only natural that arguably the most powerful player wouldn’t want to be left out: government. That’s where central bank digital currencies come in. CBDCs are not cryptocurrencies, nor are they Stablecoins – but… Continue reading CBDCs: Central Bank Digital Currencies

This type of stablecoin tries to mirror the mechanism behind the traditional central bank model, but with smart contracts instead of humans in charge. These smart contracts aim to adjust the circulating supply based on demand for the currency, Price levels are kept by issuing more tokens when demand is high (via interest-bearing shares), and… Continue reading Algorithmic-based seigniorage Stablecoins

The  growth and consolidation of crypto markets has enabled another class of collateralised stablecoins, based purely on crypto assets. This approach tries to reduce the reliance on companies and human behaviour, instead using smart contracts to manage stability in the system, This allows for purely on-chain stablecoins based on the value of the underlying cryptocurrency… Continue reading Crypto collateral-based Stablecoins

Under the hood, stablecoins are entries on global shared digital ledgers that can be transacted on decentralised, peer-to-peer global networks – just like any other cryptocurrency.  Most Stablecoins don’t run their own networks. Instead, they run on top of established blockchains, such as Ethereum or Binance Chain. This enables Stablecoins to be launched without the… Continue reading How do Stablecoins work?

Bitcoin is volatile. It has been known to change by as much as 80% in a single day, the same with other cryptocurrencies. Let’s use an example to understand the problem this would create if the everyday purchases you normally make in Euros were also priced in bitcoin. If you switched to buying your €3… Continue reading Why are stablecoins useful?

Stablecoins are a type of cryptocurrency that try to solve the volatility problem inherent to Bitcoin and other cryptocurrencies. The clue is in their name: stability is an essential characteristic of any currency that  we would want to use on a daily basis. They do this by  tracking the value of a given fiat currency… Continue reading What is a Stablecoin?

One of the main arguments raised by cryptocurrencies skeptics is that they are way too volatile to fulfil what we have learned is a key function of money. Acting as a medium of exchange to buy and sell things, and a unit of account – a benchmark for pricing. That’s exactly where Stablecoins come in. Stablecoins combine the best… Continue reading Introduction

What you’ll learn What is a Stablecoin? Why are Stablecoins useful? How do Stablecoins work? What types of Stablecoin are there? An intro to CBDCs: Central Bank Digital Currencies