Digitized Dollars: How Institutional Investors Use Stablecoins
While bitcoin has long been the headline-grabbing star of the crypto world, a much more versatile and business-friendly form of cryptocurrency has long dwarfed its usage worldwide: Stablecoins.
These are digital coins or tokens that are backed 1:1 by a fiat currency – such as the dollar, euro, pound, yuan or hundreds of other varieties of legal tender around the world. An individual or organization that issues a stablecoin should maintain a bank reserve or liquid financial instruments to collateralize it. As the name implies, this collateralization makes stablecoins much less volatile than cryptocurrencies that aren’t backed by hard currency (like bitcoin). In turn, this stability makes them more useful for payments and a less complicated savings vehicle (especially for tax purposes) than wildly-swinging bitcoin.
In contrast to stablecoins, it’s important to remember that bitcoin isn’t backed by…
