Stablecoins are stable currencies whose purpose is to solve the problem of the very high volatility of the crypto market. They are usually tied or denominated in dollars, i.e. in a fiat currency, and serve as a reference for the prices of different assets.
The stablecoin are a bridge between the value of cryptoassets and fiat currencies and could undoubtedly be of great help for the massive adoption of cryptocurrencies as a means of payment for our real life transactions.
To achieve this stability cryptocurrencies have backing in some fiat currency, in commodities, in other financial assets.
Of course, what sounds nice in theory and seems to solve the problem of high volatility of the currency brings with it other problems very similar to what is happening today with most fiat currencies, and that is the issuance of unsupported stablecoins.
Although stablecoins initially solve the issue of volatility, besides being a bridge between the crypto world and fiat currencies, they bring with them certain problems related to centralization that are contrary to the postulates that Satoshi Nakamoto made so much of in the BITCOIN white paper.
We will recall that in that white paper Satosji Nakamoto said that by means of electronic payments based on cryptographic proofs, the need for a trusted third party (generally a financial institution) was eliminated and peer-to-peer operations could be carried out, reducing costs and avoiding the problem of double spending.
Now if stablecoins are centralized currencies we are going back to using that trusted third party, which was replaced by cryptographic proofs, which would imply a kind of backward step.
If the problem of centralization of stablecoins could be solved, there is no doubt that they could be perfectly adopted as a means of exchange at a global level, solving the problems of fierce monetary emission with which many countries such as Argentina and Venezuela usually use to face their budgetary problems.
But so far all stablecoins are centralized, so they depend almost exclusively on the trust of the companies that manage them.
In short, we can say that stablecoins have advantages and disadvantages.
Among the advantages we can highlight that since they are backed by real assets, they can be exchanged quickly for Fiat currency.
We can also point out that since these currencies are stable, they provide a benchmark that is easy for everyone to understand.
As points to improve we can mention the high centralization that makes the intervention of a trusted third party necessary and the control of the operation of these is very costly in resources and time.
Let's remember what happened with USDT (Tether), perhaps the most popular stablecoin, when an audit conducted could prove that millions of dollars had been issued without backing in fiat currency, and it is assumed that it was to manipulate the price of Bitcoin and Etherum, which could negatively impact the rest of the crypto world.
