Importance of stablecoins in global payment
Published: 2022-06-06 22:21:19

<strong><h3> Cryptocurrencies are the true saviour of Fintech </h3></strong>


We all know that wealth is not evenly distributed and so is skill and mastery. Most times companies & individuals go the length of crossing borders to source the best skills at affordable rate thanks to the web. Most times, when they have sourced the right skill and the project has been delivered, the problem of payment becomes another bottleneck in this value exchange. 
Then comes cryptocurrencies the new form of digital currency to the rescue.

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Before the advent of cryptocurrencies and the blockchain, using money within and across borders was cumbersome and expensive. This is due to the high transaction service fees charged by financial institutions. The rationale of these high charges is justifiable considering the fact that these transactions were processed by people and these institutions had inherent fees to pay such as employee salaries, light bills, taxes etc. Also, another problem with this banks and financial institutions is that since they require physical locations, there's bound to be uneven distribution of banking services. Let's face it the cost associated in running a bank in remote areas is expensive due to the volume of transactions when compared to their CAPEX and OPEX and even worse the ROI is extremely low. Hence creating a problem of unbanked and under-served population.

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The world Financial Institution has faced a lot of revolution just like man. Most of this innovation is triggered by the need to solve problems encountered in the financial institution such as fragmented payment systems, fraudulent tansactions, expensive transaction fees, exchange rate variation, improper credit score, unbanked population etc. Most of the innovation in the financial institution is led by Fintech companies. Despite all these solutions, none has been as innovative and solution oriented as blockchain and cryptocurrencies because it solves the root cause of the inefficiencies in our financial system.

<strong><h3> Stable coins are the true saviour of cryptocurrencies </h3></strong>

Bitcoin and cryptocurrencies are highly volatile. One minute you're raking in massive and mind blowing gains another minute you're experiencing heavy losses which might make you lose all your investment portfolio or reduce it to relatively insignificant amount. These has been the one of the major barriers impeding it's wide spread adoption. The problem of volatility associated with these crypto tokens (both bitcoin and the altcoins) has been solved by the existence of stablecoins. 

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Stablecoins according to investopedia.com are cryptocurrencies the value of which is pegged, tied to that of another currency, commodity or financial instrument. With the web making the world a global village and facilitating exchange of services these stablecoins have become the easiest and safest payment token or digital currencies accept for services rendered. 

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Imagine you're a freelancer living in a remote or unbanked area with different bias and regulations as regards money and transactions and you successful complete a service/project for a client. When the time comes for payment, and you decide to stick to the normal fiat currency no matter the type, you will find it difficult to receive this money worse still if you find a traditional route of doing this, some percentage will be taken by charges and variation in exchange rates. To bypass this problems stablecoins are the go to cryptocurrencies or solutions. Stablecoins are devoid of bias and you have full control over your funds as well as the perks associated with cryptocurrencies with the removed disadvantage of the volatility. This removed disadvantage could also be a double edged sword since you also lose out on the massive gains as well. But if you're not keen on speculating and following fundamental news or technical analysis affecting the volatility of crypto tokens then it's better you stick to stablecoins.



<strong><h3> Examples of popular Stable coins </h3></strong>

* Tether/USDT
* USD Coin/USDC
* Binance USD/BUSD
* Dai/DAI
* TrueUSD/TUSD

<strong><h3> In conclusion </h3></strong>

Blockchain, cryptocurrencies, Non-fungible tokens (NFTs) and Metaverse are here to stay. Investing in them require expertise or domain knowledge. Stable coins have changed the game in the crypto space and has helped the unbanked areas and populace get a fair reward for their services or products and have full control over their money without any barrier of any sort.

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