Why Stablecoin Has a Bright Future

For many, cryptocurrency is seen as nothing but an investment tool or a means to an end. While Bitcoin continues to be the trailblazer in the industry, it does not have a total market share. This leads to the emergence and development of new cryptocurrency types and technologies that can serve similar or entirely different purposes.

Even with the progress that has been made so far, it’s quite clear that mainstream adaptation of cryptocurrencies remains a pipe dream. What would a world in which that would change look like? Well, experts increasingly believe that stablecoin applications could be the ones shattering the proverbial glass ceiling.

Unlike their fluctuating counterparts, stablecoins maintain an all but consistent value, thanks to their underpinning by another asset. The US dollar is a very good example.

This has brought stability to stablecoin options, such as Tether, which always values approximately 1 USD. The question is, why would stablecoin see mainstream adoption and what does it bring to the table?

Stability in Lieu of Volatility

Apart from being a decentralized medium of exchange with great levels of privacy, cryptocurrencies are also known for their low level of price volatility. This is not necessarily something that benefits the investment space very much, but it does benefit those looking for an alternative medium of exchange.

This allows for much greater predictability and consistent spending power; elements which are arguably fundamental in the kind of widespread adaptation being sought after.

A Means of Consistent Storage

Beyond being a predictable measure of exchange, stablecoin also presents a great store of value. For many reasons, stakeholders would rather be storing their holdings in an alternative to traditional Fiat currencies. Cryptocurrencies would be able to fill this void, but there is no telling what the stored amount would look like even a week down the line.

With the presence of an underpinning asset, conversions to and storage as stablecoins greatly address this concern. Because of its nature, regardless of how long it is stored, the expectation is that the real change of value over time should be approximately zero.

History has proven this with some of the current stablecoin options in the market. If this trend is anything to go by, stablecoin presents quite an attractive form of storage for stakeholders.

Wider Application

What would you be looking to use stablecoin to do? The answer here is just about anything that can be built on a pillar of stability in exchange. There are numerous operational areas, including non-fungible tokens or NFTs that could have a way closer relationship with Bitcoin than is the case now.

The reality is that the required stability just isn’t there. Instead, you find that the relationship to stablecoin is a lot closer. This advantage is what makes the cryptocurrency type such a valuable alternative to other exchange media.

So, while investments and the need for returns are likely going to continue piggybacking on cryptocurrencies, such as Bitcoin, innovation is more likely going to be charting its path with stablecoin at the fore.

Final Remarks

There have been concerns in the past about the extent to which stablecoin could be viable in an industry where returns form a huge part of the success criteria. However, thanks to the need for stability in both some current applications and newer ones to come, it’s not hard to see stablecoin becoming the necessary standard.

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