Stable coins are another version of crypto currency, they serve a different purpose from the ordinary crypto coins we are used to. The total number of stable coins in circulation are backed by fiat money or commodities, therefore they have certain advantages and disadvantages which we are going to be looking at:
Advantages
Not volatile – These coins were created with the intentions to reduce volatility. They don’t move that
much like other crypto e.g. Bitcoin, so they maintain their value.
No Restrictions – They can be sent through the internet anywhere in the world and cannot be stopped.
Cheap – They are cheaper to transact with as compared t other crypto coins.
Disadvantages
Centralization – They are said to be decentralized but somehow some of them they are centralized because they are controlled by certain companies.
Backed – These coins are backed by either fiat money or commodities which means their future is dependent on things which back them. If the financial markets crush then backed stable coins are vulnerable.
Stable coins might be good enough provided that the outside economic factors are on the right channel because a fall in those factors will have an impact on the value of stable coins since they are backed, but for the mean time they are the perfect coins for maintaining value.
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