Despite the uncertainty in the world economy this year, 2020 will be the year of stable currencies due to the explosive growth of the digital sector and new developments everywhere. While some attribute this growth to the growing interest in decentralized financing among cryptocurrency enthusiasts, others see it as an upward trend confirming the flow of fiat currencies into the crypto ecosystem.

As the DeFi sector continues to grow, the popularity of stack coins has also been used to generate high returns from various decentralized lending projects. Stable currencies are also advantageous because of their ability to bridge the gap between fiat currencies and digital assets. Stable currencies have started the year with a strong tone, with cumulative turnover of over $ 90 billion for the first time in the accounting quarter. While Tether (USDT) continues to have the majority of the stable foreign exchange market, Dai and USDC have had gains in 2020.

Since the launch of the first stable currency in 2012 with the proposal from the Mastercoin project as a way to link cryptocurrencies to traditional assets to reduce price volatility, developers have been accustomed to using US dollars as a fixed asset.

However, developers are currently experimenting with other stable assets such as gold, other fiat currencies and even cryptocurrencies. Here is an updated look at the current state of stack coins as a list of the best stable currencies on the market.

Dollar stable coins
Tau (USDT)
Like any stable currency, Tether is designed so that investors can store profits by trading cryptocurrencies in a dollar-denominated digital currency. Quote of the site: “Each rope is always supported by the ratio 1: 1 in the traditional currency that is in our reserves.” This means that for every USDT coin it corresponds to $ 1 in the company’s reserves. According to Coinmarketcap, Tether is currently the most popular stack coin with a market value of over $ 15 billion and a daily trading volume of over $ 40 billion.

Despite issuing company Tether’s claims that tokens are 100% backed by liquid reserves, several parties have expressed doubts about the company’s claims in the past. But regardless of the controversy, the amount of US dollars in circulation has recently increased from just over 4 billion dollars in circulation in early 2020 to 15 billion dollars. Most experts believe that DeFi has made a significant contribution to USDT’s huge mining operations.

In addition, the rapid increase in USDT dominance has pushed the currency to surpass payment platform giants such as Bitcoin and PayPal in terms of average daily value of conversions in excess of $ 3.5 billion. With its popularity growing, Tether now plans to move most of its delivery to faster networks as the Ethereum network continues to face higher gas charges.

Currency in US Dollars (USDC)
USD Coin was released in 2018 as a 1: 1 stablecoin linked to the US dollar by Circle, a blockchain-focused financial services provider. In terms of stablecoin transparency, Circle states on its website that USDC reserves are reviewed monthly and released to the public by leading accounting services.

Like Tether, the USDC is growing rapidly, with a volume of over $ 1.8 billion over the last six months. Recently, the Center (a consortium founded by Circle and Coinbase to develop USDC governance) announced the expansion of USDC from Ethereum to more blockchain chains. This measure aims to ensure that the USDC remains flexible enough for large-scale economic innovation among DeFi projects.

Paxos Standard (PAX)
According to the website, Paxos, the company behind PAX stablecoin, claims that stablecoin is the most liquid and well regulated in the world. PAX is listed on over 150 exchanges and has over $ 100 million in daily trading volume and a total of $ 2 billion in PAX coins in circulation.

Like its counterparts, PAX is a digital dollar that can be used to quickly move money around the world at any time. Stablecoin is built on the Ethereum ERC-20 protocol, and the client funds are held in segregated accounts secured by the Federal Deposit Insurance Corporation.

Binance (BUSD)
Binance USD (BUSD) is a stable currency linked to the US dollar that was launched as part of a partnership between one of the largest cryptocurrency exchanges and Paxos. Stablecoin has so far received approval from the New York State Department of Financial Services. This allows other financial institutions in the New York City area to maintain BUSD custody without having to obtain licenses prior to custody from NYDFS.

Source: CoinTelegraph