Stable Coins Necessary?

[asayoyaasa]

Ya I think its really necessary to have stable coin, people stil need it for safe their fund when they are not doing trades. Also to avoid the dump market, just Tethered your fund that is safe your amount.

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[fempat]

You can't enjoy e-commerce when the price of commodities fluctuate. In fact many people will not use cryptos because of this. One of the characteristics of money is that it must have store of value.

[ArtemSergeevich]

So many currencies are definitely not necessary, I feel some kind of deception here, we need one stable currency pegged to its equivalent, for example usdt to the dollar, euro to euro, pound to pound, and so on. I consider the rest as artful manipulations that are clearly not in our favor.

[Karlinz]

The concern is if the so called stable coins are really stable, We had thought usdt to be a stable coin initially until later we realized it wasn't, a stable coin should be one with no obvious value fluctuation against real  usd for instance. This should in some way be the real alternative in merchant and goods payment as the users do not have the fear of value change afterwards just like we have in cryptocurrencies and the should have free or very litle transfer charges

[iconoclast]

Currently seems every project or crypto company wanna create a stable coin now, except USDT, currently we have GUSD, TUSD, PAX.

But do you think it's really necessary to have so many stable coins?

Not really, you really only need one good stable coin per fiat currency. But like everything if it is restricted to one player you end up with a monopoly and the temptation of the people behind the coin will be to extract as much economic rent from it as they can. I suppose at some point we may even see central banks creating their own tokens to try and reassert control over the monetary system as their economic rents come under threat.

[leow]

Personally, I am a relatively stable coins can be attributed to DOGE coin. This token was created a long time ago, and holds its price very well, even at a time when the market is very unstable. Therefore, it can be used as a token to preserve your assets

[thanhtux92]

Stable coin are important, institution can use it for making transactions without fear of a sideways market!! for me it will help improve adoption and mitigate risk for lots of business

[moonblocks]

Assets that are stable in value particularly those that are pegged to a FIAT currency are important for traders and investors who require a safe haven for their capital when the market is volatile, and the more options there are the lower the fees are likely to be due to increased competition

[Andruha1993]

It would be nice to have more stable coins. Because it seems to me that if you invest in stable coins, you can not worry that the price of this coin will fall very much down.

[just_strange32]

Coins have outstanding features compared to cash. But it is limited to fluctuations and safety is not high. Therefore, if the coin is to overcome its instability, in the near future, it will be popular and widely used around the world. Therefore, the stability of the coins is very necessary.

[stoxalpha]

In theory, the emergence of a large number of stable currencies is an acknowledgement of cryptocurrency, but if the stable currency is very stable, it may affect bitcoin, and a successful and stable currency market value may exceed bitcoin.

[BaraxLo]

I don't think so and I personally prefer to exchange directly into fiat money, especially there are many local exchanges that support fiat as trading pairs in their exchanges.

Well, you also have to understand that not every exchange deal directly with fiat, as that will always need some huge form of regulation over time, which I believe that some are being a bit set aback as a result of that and one of the reasons why we are seeing some groups in collaboration with banks and some legal framework, coming with their own physical backed stable coin.

USDT has been in the limelight with huge volume over the years, but the fact remains that there is something shady that is making investors worried, so having alternatives which you can trust more, to at least hedge, is not a bad idea. There is always good thing about competitions anyway.

[voztata]

Currently seems every project or crypto company wanna create a stable coin now, except USDT, currently we have GUSD, TUSD, PAX.

But do you think it's really necessary to have so many stable coins?

Well, the idea of stable coin is just to have something you can hedge and if some group of people decided to come up to make this happen, as long as they are legit, then I see no problem at all with that. One of the reasons why USDT has been having issues is the fact that they are not transparent, has refused auditing and there are so many questions regarding some shady behaviors with USDT that is pretty bad for the market. However, what is important is that no matter the stable coin we are making use of, we should at least make some due diligence on them, and be sure, we are actually not ending up with another tether.

[dulinivanrus]

Stable coins are not so interesting for earning, cryptocurrency attracts with its instability and colossal interest rates !

[iTradeBit]

Yes, we do. By this way more people will trust crypto currencies.

[troy.gold]

Stable coins are necessary in order to protect your investment during downtrends. Unfortunately - you cant profit from a stable coin, sure you may make a fraction of a percent here and there but there is no real return. I am ignoring teather's recent volatility as it isn't common.

See below

https://medium.com/coinmonks/fundamental-problem-with-all-stable-coins-339516acb094

“Stable” coin is a hot topic, Haseeb Qureshi had a great Medium blog post dissecting three types of “stable cryptocurrencies”. Here’s the link to his article. I will go over the pros and cons of all three categories later in this post, but Haseeb, and many other commentators are missing the point and so do all “Stable” coin designers. All of these coins have one characteristic in common: they all target a specific price. I assume the thinking goes: “if the price doesn’t change much, that would make a coin stable”. I think it is a big mistake. First of all, when a specific price is targeted that means that any time price moves away from that target, an organization tasked with maintaining the price stability will use their predetermined process to force the price in other direction. Historically that is how any price peg is maintained. And as we all know pegs have tendencies to be broken. It becomes a game of who has more resources, people that are trying to break the peg and people that are trying to defend it. George Soros is a poster child of peg breaking. Any time speculators feel that they have enough resources to break a peg they go for it. It’s just a matter of time when a peg is attacked. When investors lose confidence in the peg or price stability that spells the end of that particular “stable” asset. But that is not even the main problem with targeting a specific price level.

Stability in itself should be viewed as a valuable resource, and the value of any market resource is changing based on the demand. When volatility is up or inflation increases (reduced stability in the world financial markets) demand for stable asset would increase, and when volatility is decreasing and there is no threat of a runaway inflation, demand for stability goes down. These market forces make stable assets more stable, it regulates its supply and makes such assets productive.

A great example of a stable asset is gold, and gold price moves around. It is determined by market forces and perceived stability of the global financial system. The dollar is another example. It’s ironic that many stable coins are trying to target a price equal to one dollar, but the price of the dollar itself (as stable as it is) moves around against other currencies. Stability of the dollar or gold does not come from targeting a specific price. A dollar is relatively stable (compared to many other currencies) because it powers the US economy, biggest and most stable economy in the world. Gold is stable because it has a perceived value and that perception has been around for millennia.

Targeting a specific price actually makes stable cryptocurrency less stable. As demand for the stable assets is increasing or decreasing it put pressure on whatever stabilization mechanism that currency is using. Increasing stress on the stabilization process and cost of that stability.

As far as the three known categories of stable cryptocurrencies, there are examples of all three and many are viable and I am sure many more will be created. But all three have problems.

Cryptocurrencies backed by fiat currencies are probably the best know “stable” cryptocurrencies. Tether and TrueUSD are good examples of this category, but Tether specifically is used not because of it’s stability, it is used as a US dollar substitute by many crypto exchanges. Exchanges are afraid of dealing in USD directly because they don’t want to answer to US regulators and they all use USDT instead. As any asset-backed token, dollar backed currency is as stable as the dollar itself, as long and the relationship between the underlying asset and the token is transparent and safe. Even though Tether is in demand, the shortcomings of the dollar backed tokens are obvious, creating cryptocurrency backed by a fiat currency means that the coin’s ecosystem has to be plugged into a traditional banking system to hold the underlying fiat currency at best with a centralized custodian. And the risk of that design is front and center in the Tether implementation. Tether cannot be open about where the dollars backing the currency are held without exposing itself to the wrath of US banking regulators. As a result, it’s unclear who is holding the dollars for Tether and how much of it is there. One call from US regulators to any bank that is doing business with Tether and that relationship is gone.

A good example of a “stable” coin backed by crypto collateral is Dai by MakerDAO. The market cap is growing, it stands just over 40mm USD. Dai seems to be pretty stable so far, but to achieve that stability, Maker is over collateralizing its tokens. That process makes the stable currency expensive and whether it will be able to significantly grow its market share remains to be seen.

The last and my favorite (I am being a little facetious here) category is “stable” currencies with stability provided by an external resource or an economic schema where some other resource (usually a second coin) is used to maintain the stable price of the first one. Basis (formally known as Basecoin) would be a good example. It is unclear how this coin will behave, especially at the time of a significant market stress. I view these systems as artificial, and ultimately, artificial systems use external resources to maintain stability. Investors have to trust that participation in these type of dual coin models will be profitable. The second this trust in an outside resource or a dual coin structure is gone these type coins would collapse. Resources have a tendency to run out and I think at a time of some market crisis these type of tokens will not do well. I may be proven wrong, time will tell.

So how can a stable cryptocurrency be created, or what could make a cryptocurrency stable? In short, a truly stable cryptocurrency has to have its own stability and not rely on another asset or another coin to maintain its price. A stable crypto ecosystem has to be created and a cryptocurrency that is an integral part of it will be as stable as the ecosystem itself. Both Bitcoin and Ethereum ecosystems are growing and gaining stability, these currencies won’t be viewed as stable in comparison to gold or dollar any time soon but they are gaining stability. As a number of market participants increase these currencies will be less volatile and more stable. Stable ecosystems mean there is a stable demand for the currencies, not just from traders and speculators. The current value of these two and other cryptocurrencies is based purely on real or perceived demand generated by investors entering the crypto market. The influx of new market participants is significant and for now, it doesn’t add to the stability of these cryptocurrencies.

So, what will a real stable cryptocurrency look like? Here’s my list of attributes:

It will run on its own blockchain that is a well understood and safe
It will support a large ecosystem with a stable and significant number of the daily transactions.
The value of this currency will have a direct correlation to the size of its network
It will not be backed by any other asset
The price of this currency will be allowed to fluctuate based on supply, demand, market sentiment, etc.
The value will not depend on gimmicks like token burning, etc.
Fungible Network is working on such currency. We believe it will be the first cryptocurrency where stability will be a byproduct based on real returns the currency can generate for its holder.

STAY TUNED!

Dan Raykhman, CEO of Fungible Network

[anjho.ace]

Yes! why not? but will there be enough demand on the coin if they will just be a stable coin?
What is the main purpose to get the token if there will be no earning in the future?
most people in cryptocurrency community are looking for a coin to hold and rise the price in the market soon!

[wojteks102]

If there is more stable coins projects than percentage of market role of Tether is going lower and lower and that's good because right now there was too many volume linked to one stable coin.

[nebuch]

I personally doubt that there are stable coins due to the fact that crypto market won't ever be stable. I know the main characteristic of crypto market is volatile. It means in all season in any moment it is always possible to experience change. Once bitcoin be stable for long there will have stable market. Correct me if wrong a about my opinion.

[john_nautica]

Currently seems every project or crypto company wanna create a stable coin now, except USDT, currently we have GUSD, TUSD, PAX.

But do you think it's really necessary to have so many stable coins?

indeed, stable coins are needed, this can help investors to save coins on some stable coins. this is like a savings system where even long-term hold prices can be stable and that is good for asset security systems.