Stablecoins can be pegged to the price of gold, oil, a digital asset, or a group of them. However, for a beginner in the crypto world, a token based on the U.S. dollar may be the simplest and most understandable option.
It should act as a bastion of reliability against the backdrop of constant changes in the blockchain sphere. After a series of high-profile falls, such as Terra Classic (USTC-USD) in 2022 and Real USD (USDR-USD) in 2023, users are cautious about even the best stablecoins. To avoid losing, it is worth taking a prudent approach to the choice of this kind of cryptocurrency.
USD Coin (USDC-USD)
The constant volatility of the crypto world is not about USD Coin (USDC-USD). This digital currency is a tokenized U.S. dollar, backed by U.S. dollars or dollar-denominated assets such as U.S. Treasury securities. The country’s regulated financial institutions hold reserve assets of this coin so that users can be assured of a parity ratio between their USDC and real greenbacks.
For a beginner, operations with stablecoins should be clear and transparent. Any complication is a reason to worry and abandon the transaction. When an investor decides to buy one USDC with funds in the bank account, their fiat funds are deposited. At the same time, one USDC appears in the investor’s wallet.
Also, the sale takes place according to a different scheme because the record in the blockchain already exists. When an investor receives a fiat dollar, the USD Coin is transferred to a wallet without access keys (USDC is burned).
Its ease of handling has led to the coin taking a worthy place in the best stablecoins ranking as a reliable way to hedge against inflation. Buying USDC is much easier in many countries than depositing U.S. currency into a bank account. Also, this versatile digital asset allows purchases in tenths of a cent. This flexibility increases the accuracy of calculations and payments.
Tether (USDT-USD)
Traders often choose Tether (USDT-USD) to quickly switch between crypto and traditional currencies. This way, they are not subject to the potentially harmful effects of cryptocurrency volatility and can keep their assets on a crypto exchange.
This coin is a leader among the best stablecoins in terms of the frequency of exchange for digital assets. The volume of trading with its participation exceeded $85 billion per 24 hours. That is significantly higher than other stablecoins.
Further, a large number of trading pairs with USDT make it convenient to use. This is especially important in times of volatility when traders need to exit a position quickly without unnecessary movements and overpayments. Decentralized finance (DeFi) applications have several operations involving Tether. In most cases, such platforms accept USDT as collateral for loans or as a means of earning money on loans.
Initially, Tether used the Omni Layer of the Bitcoin network as its transport protocol. Now, it is available as an ERC20 token on Ethereum. Thanks to this and other improvements, the coin has become the most frequent participant in money transfers and cross-border payments.
Finally, the main advantage of using this token for beginners is its wide acceptance. Trading platforms, NFT marketplaces, and crypto exchanges accept USDT and provide an opportunity to exchange these coins for other blockchain assets. The combination of price stability against the USD and low transaction fees makes Tether a convenient tool for operating in the crypto-financial space.
TrueUSD (TUSD-USD)
TrustToken and PrimeTrust launched TrueUSD (TUSD-USD) back in 2018. As of 2024, it has matured and is operating on several blockchain networks at once, including Open Network, Ethereum, and Binance Smart Chain. The issuer has taken care of the independence and security of the token’s stable exchange rate by specifically depriving itself of direct user access (TUSD buyer) funds. These USD funds are kept in third-party escrow accounts.
Additionally, the token is globally traded. This is helpful for beginners from countries with limited access to banking services or unstable local currencies.
The market capitalization of TrueUSD reached $3.81 billion in October 2023. With the intensification of the bull market, the value of capitalization fell, as investors moved into growth assets. At the end of this trend, we can expect the token to return to high levels. The reason for this may be the stablecoin’s commitment to transparency and openness.
Notably, TrueUSD was the first among the best stablecoins to introduce real-time certification of its basic reserves from independent third-party institutions. Any user can check whether the amount of TUSD in circulation is fully covered by reserves. Thus, the project maintains a high level of trust and democratizes user access to TrueUSD reporting.
On the date of publication, Julia Magas did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
