CC#026 - Stability in Crypto.

A Stablecoin Cheat Sheet

Stablecoins are tokens usually intended to match the value of a particular fiat currency, like the dollar or pound. They represent an ideal solution for storing or trading digital assets while also presenting a paradox.

Their ability to assist with trading, valuing or transacting cryptocurrencies is obvious (‘I have made 260,000,000,000 satoshis of profit’ is not exactly intuitive).

However, if we follow a bitcoin maximalist line of reasoning (‘Bitcoin is the only true crypto, as it doesn't have a CEO’), stablecoins will ultimately be redundant when the fiat currencies they represent have a value of zero.

I have discussed the ‘death of fiat currencies’ perspective in another article. I will use this article to provide an overview of the major stablecoin projects and their differences. This will help you to understand the risks and features of each stablecoin to help you keep more of your wealth and profits.

As we shall see, not all stablecoins are equal. The most significant (Tether - USDT) has a shady and controversial past. Some are very centralised around a particular exchange (BUSD), and others have caused the most dramatic and painful collapse ($50 billion+) in crypto history (UST) while marketing themselves as a ‘low-risk’ crypto investment.

Let’s examine eleven different stablecoin projects, in terms of their design to understand how each stablecoin works and what that means for you and your money.