Are stablecoins becoming a new form of savings in high-inflation countries?

[hugeblack]

Quick question:

Why would someone hold a stablecoin that doesn't grow in value for years, yet there is Bitcoin that is capable of going at least 2x after some months?

Just so you know, even the US dollar is prone to inflation. Which is why people try to look for assets that store value.

Usually because their investments are less than $100 per month and they need that money in less than a year, so keeping Bitcoin may cause a loss in the short term. If the investment is long-term, gold and Bitcoin are a much better, and it is possible to diversify between them.

[avp2306]

Quick question:

Why would someone hold a stablecoin that doesn't grow in value for years, yet there is Bitcoin that is capable of going at least 2x after some months?

Just so you know, even the US dollar is prone to inflation. Which is why people try to look for assets that store value.

Usually because their investments are less than $100 per month and they need that money in less than a year, so keeping Bitcoin may cause a loss in the short term. If the investment is long-term, gold and Bitcoin are a much better, and it is possible to diversify between them.

I think its not always about how small their investment is, but rather their target or goals. Usual thing I've seen from those people choose to hold stablecoins is they are speculating for possible next big dump and they are trying to catch those dips. Those USDT they hold is their reserve to make sure that they have funds to use when that situation came.

If people aim for short term hold Bitcoin or other volatile coins, this might give them negative result. Since those coins could possibly dump and their small funds might get affected.

But will agree on what you have said that if they aim for long term. No other best asset to have is Bitcoin and Gold and statistic and history will show or point out that they are consistent asset which gives great potential return to their investors.

[Y3shot]

I'm curious what others think about this. Do stablecoins represent genuine competition for traditional banking and local currencies, or are they still mostly a temporary tool for the crypto market? And if stablecoin adoption keeps growing in countries with high inflation, could governments eventually see it as a much bigger economic issue than Bitcoin itself?

The stable coin and your traditional currency are still the same thing. The only difference between stable coins and your traditional currency is that stable coins are digital, and their value is tied to your own currency.

It is not really stable because it is pegged to the USD, which is a traditional value affected by inflation. Many people in developing countries see stable coins as an edge to escape inflation; they can be of good benefit for some people, but they are not a store of value. Inflation affects stable coins just like it affects every other currency. Those who spend USD as currency in their country will tell you how badly inflation affects it.

[asriloni]

Usually because their investments are less than $100 per month and they need that money in less than a year, so keeping Bitcoin may cause a loss in the short term. If the investment is long-term, gold and Bitcoin are a much better, and it is possible to diversify between them.

I think it's not even related to the how small money owned by people. If what you said is true, we'd not have more than 300b stable coin in circulation. In fact, stable coin is giving so many benefits such as fixed yield, ability to participate in the ico, providing liquidity, and etc.

Providing liquidty in a hype chain such as Robinhood with stbale coin/ blue chip coin pair can give us daily APR ranged from 30% - 100% ++. So it's enough to offset the inflation even if we're providing LP for several months.

If we're only seeing it from the fiat currency perspective, it sounds useless. However, things changed, and holding stable coin also provides us various ways to also fight inflation. No doubt the demand of stable coin is also growing fast.

We have to see it from various POV to make it fair.

[Synchronice]

I'm curious what others think about this. Do stablecoins represent genuine competition for traditional banking and local currencies, or are they still mostly a temporary tool for the crypto market? And if stablecoin adoption keeps growing in countries with high inflation, could governments eventually see it as a much bigger economic issue than Bitcoin itself?

How can stablecoin itself be a competitor for traditional banking or local currencies? First of all, when it comes to traditional banking, it's a big and the most powerful financial system in the world, stablecoin is just a currency, so it's like comparing apples to oranges. Secondly, when it comes to local currencies, it can compete in some way but irony here is that stablecoins are backed by local currencies, they are nothing without it. And thirdly I would add that all it takes to end the whole stablecoin game is that the government will take a law that will ban stablecoins and that's it, no competitors for local currencies in any form or way.

[Fiatless]

I'm curious what others think about this. Do stablecoins represent genuine competition for traditional banking and local currencies, or are they still mostly a temporary tool for the crypto market? And if stablecoin adoption keeps growing in countries with high inflation, could governments eventually see it as a much bigger economic issue than Bitcoin itself?

Is there any difference between a stablecoin pegged to a national currency and the local currency? Both of them are tied to thesame economy and suffer from thesame economic conditions. The competition might be between a US-backed stablecoin and ones pegged to local currencies. In the case where the local currency loses value rapidly, people will gladly use stablecoins like USDT.

Stablecoins might not pose economic problems since they are issued by centralised companies. The goverment can easily make laws to control the use of stablecoins. They are more concerned about a currency that is decentralised, making it difficult to control.

[BALIK]

And if stablecoin adoption keeps growing in countries with high inflation, could governments eventually see it as a much bigger economic issue than Bitcoin itself?

I would not say this is problem solely for countries with high inflation. It is major issue for developed nation as well.

European Central Bank has likely been working on creating its own digital euro since 2023 or 2024. Why are they doing this? Because they are apprehensive. If ordinary people and business start using dollar or stablecoin instead of euro then their currency's global significance could diminish.

So you would be mistaken to view this merely as problem for poorer nation. Even countries with strong currency fear that dollar and stablecoin could displace their own currency. No govt is taking this matter lightly anymore. And whether you're talking about Bitcoin or stablecoin, they actually place them all in same category.

[viljy]

This trend is indeed present. Especially if transactions involving dollars are heavily restricted. Stablecoins, in turn, are "cross‑border", they are not controlled by banks, and at the same time they can protect against local inflation. Often, stablecoins are more expensive than the dollar when exchanged (not by much, but still, this is an important indicator).

Of course, people who don’t live in such economies simply can’t understand this. They will be trapped in a web of illusions: "dollar inflation" (whereas dollar inflation is like a flea compared to the inflation of the local currency, which is as big as an elephant); "long‑term planning" (well, that’s just ridiculous for most people, whose planning horizon is a few months or even less). Of course, hypothetically, there is a risk of stablecoins being frozen, but what is the probability of that? For most users, it’s negligible.

[Accardo]

I think its not always about how small their investment is, but rather their target or goals. Usual thing I've seen from those people choose to hold stablecoins is they are speculating for possible next big dump and they are trying to catch those dips. Those USDT they hold is their reserve to make sure that they have funds to use when that situation came.

Stable coin is profitable to traders who convert bitcoin to USDT in bullish times, waiting for the bear season to accumulate more btc, with the stables. USDT for instance, gives investors the power to decide whether to go stable or volatile depending on the Market trend. It lessens the burden of high volatility, and bearish season losses, and permits traders the opportunity to be smarter with the market volatility. 

[abhiseshakana]

This trend is indeed present. Especially if transactions involving dollars are heavily restricted. Stablecoins, in turn, are "cross‑border", they are not controlled by banks, and at the same time they can protect against local inflation. Often, stablecoins are more expensive than the dollar when exchanged (not by much, but still, this is an important indicator).

Of course, people who don’t live in such economies simply can’t understand this. They will be trapped in a web of illusions: "dollar inflation" (whereas dollar inflation is like a flea compared to the inflation of the local currency, which is as big as an elephant); "long‑term planning" (well, that’s just ridiculous for most people, whose planning horizon is a few months or even less). Of course, hypothetically, there is a risk of stablecoins being frozen, but what is the probability of that? For most users, it’s negligible.

I can imagine it even i'am not living on a country with hyper inflation. I can understand it because as exporter when The USD weakened, I also immediately converted it to rupiah upon receiving the money to avoid profit erosion caused by exchange rate fluctuations. So i can imagine the pressure reality on a country with extreem inflation.

My simulation as worker when i trapped on a country with hyperinflation economy, when i got my income i will calculate between inflation rate for a month with conversion cost from local currency to USDT on peeer to peer exchange. Then i will choose let the money stay on my local bank account with possibility loose its value within several week or without delay, immediately converting the entire salary into USDT. If conversion cost is cheap then we got solution but problem rise when price of stable coin higher than real USD on local market. a high buying rate plus application fee are cost of conversion i must pay and when i need to spend those money for daily needed i must do reconversion. i think it will draining my money instantly.

I see stable coin not a solution for wide community, it is only for some people who know technology, many lower and middle income family doesn't have digital literation even acces to crypto exchanger for making conversion