Stablecoins are a special kind of cryptocurrency. Unlike Bitcoin or Ethereum, their price stays close to a fixed value, usually $1. They are linked to real assets like the US dollar, gold, or even other cryptocurrencies. This gives users confidence that the value won’t crash overnight.

What Are Stablecoins?

Stablecoins are digital coins made to keep a steady price. They are used for trading, saving, sending money across borders, or even making daily purchases. The key idea is to combine the fast, global nature of crypto with the price stability of regular money.

There are different types of stablecoins:

• Fiat-backed: Each coin is backed by real money in a bank (like USD or EUR).
  
• Crypto-backed: Coins are backed by other crypto assets, with extra balance to handle price swings.
  
• Algorithmic: The price is controlled by computer programs that balance supply and demand.

Why Stablecoins Are Becoming Popular

Many people avoid crypto because prices go up and down too much. Stablecoins solve this problem by keeping a constant value. This helps users feel safer when sending money or holding digital assets.

Stablecoins also make international payments faster and cheaper. In some countries with weak local money, people use stablecoins to protect their savings. Businesses use them to pay workers, and platforms use them to power apps and games.

Stablecoins vs Traditional Currencies vs Cryptocurrencies

How Governments View Stablecoins

Governments are paying attention to stablecoins. Some worry they could affect national currencies or help people avoid taxes. Others see them as useful tools for future payments.

The U.S., EU, and other regions are working on new rules. They want to make sure stablecoins are safe, backed by real assets, and managed well. This will help build trust and stop scams or misuse.

Some central banks are also testing their own digital coins (called CBDCs), which are like stablecoins made by governments. These could be used for public services, taxes, or direct aid to citizens.

Use Cases of Stablecoins

Stablecoins are more than just money that doesn’t change value. They are now used in many areas, including:

• Remittances: People send stablecoins to family in other countries to avoid high bank fees.
  
• Online Payments: Some online shops and apps accept stablecoins for fast, low-cost payments.
  
• Savings: Users in countries with weak currencies use stablecoins to protect their funds.
  
• DeFi (Decentralized Finance): Many crypto apps use stablecoins as the base currency for lending or earning interest.
  
• Gaming and Apps: In online games and platforms, stablecoins are used for buying items or tipping creators.
  

Key Benefits of Stablecoins

• Keep a steady price, which is helpful in uncertain markets
  
• Allow fast and cheap money transfers worldwide
  
• Work with apps and platforms without needing a bank
  
• Help people in unstable countries store value safely
  
• Can be traded easily on major crypto exchanges

Challenges Ahead

Stablecoins are not perfect. Some face problems like poor management or lack of real asset backing. In 2022, a few algorithmic stablecoins failed, causing users to lose money. This shows the need for better rules and regular checks.

Privacy is also a concern. Some users like crypto because it offers privacy, but regulators want stablecoin providers to check user IDs. Balancing these needs will be important for future growth.

Another issue is competition. As governments create their own digital money, private stablecoins may have to adjust or work together with public systems.

Stablecoins are changing how people think about money. They offer stability in the fast-moving world of crypto and new ways to send, save, and spend. As more people and businesses use them, stablecoins could help make global payments faster and simpler. The key will be building trust, setting clear rules, and keeping things transparent for everyone.

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During the trading session, the price of Ethereum reached the maximum value of $4770, the publication specifies.

During the last week and a half, starting from October 28, Ethereum renewed historical records of cost four times.

The rise in demand for the cryptocurrency was triggered by a Finder.com report based on a survey of cryptoanalysts, who predicted Ethereum to be worth $5100 per token by the end of 2021. The report also indicated that Ethereum’s price will reach $50,000 by 2030.

The publication notes that a number of analysts predict that Ethereum will overtake Bitcoin as the No. 1 global cryptocurrency by mid-2022.

As Ethereum’s price rises, transaction fees for the cryptocurrency also rise: the average transaction fee was $41.53 as of Saturday, November 6, which is about three to four times higher than in August.

At the moment, Ethereum’s market capitalization is still about half of Bitcoin’s market capitalization: $554.5 billion versus $1.2 trillion.

Ethereum has gained 31% in value over the past month and 535% since the beginning of 2021.

Translated with www.DeepL.com/Translator (free version)

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The two most popular cryptocurrencies, Bitcoin and Ethereum, account for more than half of the capitalization at $1.8 trillion.

It took the cryptocurrency market six months to increase capitalization by $1 trillion.

During May, the rise in price of mainly Bitcoin and Ethereum led to an increase in market capitalization to a record $2.6 trillion. After that, a decline began due to restrictions on the crypto market in China, and the record could be repeated only on October 20.

Over the past three weeks, the cryptocurrency market has twice updated historical capitalization records.

For the first time, the increase in capitalization was not due to Bitcoin’s rise in price, but due to the rise in price of other cryptocurrencies. They account for 41% of the market value of all virtual assets.

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“I think it’s wise to own cryptocurrency as part of a diversified investment portfolio. But don’t take that as investment advice,” Cook said during the DealBook conference.

The Apple CEO did not specify which cryptocurrencies are part of his investment portfolio.

He added that he was first interested in cryptocurrencies, then he researched the crypto market in detail.

Cook stressed that cryptocurrencies are his personal interest, not concerning Apple in any way.

The company is not considering selling iPhones or other gadgets for cryptocurrency, as it could negatively affect Apple’s stock price.

Apple currently has no products or services related to cryptocurrency. The company allows cryptocurrency wallet apps in its iPhone app store, but prohibits mining apps.

Cook added that while Apple is exploring cryptocurrency technology, it’s “not something we plan to do anytime soon.”

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