Stablecoins are digital currencies which were designed in a way that allows them to resist high volatility. This is also their greatest difference from regular cryptocurrencies, such as Bitcoin.
Stablecoin popularity grew in 2018 mainly because of the bear market, which was so damaging to coins that suffer from high volatility. Since each stablecoin token is backed by a certain amount of fiat currencies (1 stablecoin = $1), investors found refuge in this growingly popular type of crypto.
Tether (USDT), became the largest stablecoin on the crypto market, and even today, it is still among the top 10 cryptocurrencies by market cap.
As 2019 begins and regulatory compliance is at the horizon, stablecoins continue to garner attention, Forbes reports.
Numerous stablecoins have flooded the cryptocurrency markets, with many of them directly backed by exchanges. Exchange-issued stablecoins include Coinbase and Circle’s USDC and Gemini’s GUSD, both of which are fiat-collateralized.
Other fiat-collateralized stablecoins available now include the Paxos Standard Token and TrustToken’s TrueUSD.