strongest stablecoins
Stablecoins are arguably one of the biggest innovations in the crypto world. They offer a form of stability compared to volatile cryptos such as Bitcoin and Ethereum. With the bear market swinging its axe heavily on the market, both Bitcoin and Ethereum have lost more than 65% of their value.

However, despite the ugly state of things for Bitcoin and Ethereum, stablecoins performed relatively well in the bear market. Stablecoins are simply digital assets whose value is pegged to fiat currencies such as US dollars or British pounds. Let’s look at a few reasons why stablecoins are useful for crypto adoption.

Stablecoins and Crypto Adoption

Crypto adoption is a huge topic amongst several crypto experts. The crypto industry witnessed impressive growth during the last bull market, sponsored mostly by the rising value of cryptocurrencies such as Bitcoin, Ethereum, and other altcoins. Furthermore, DeFi protocols unlocked new financial opportunities for the crypto space, attracting new users.

However, the crypto growth rate slumped during the bear market and was worsened by the collapse of top platforms such as FTX, Terra, Voyager, and Celsius. With regulators casting their focus on regulating the crypto industry, investors have become wary about investing in new projects, and some tokens seem to have lost their spark and value.

However, Patrick Hansen, Director, EU Strategy, and Policy Advisor at Circle, believes stablecoins could be crypto’s way back to global relevance. The term means these digital assets serve the true purpose of crypto. Hansen argued that stablecoins showed their true potential during the bear market and managed to capture global attention.

According to the thread, stablecoins are fulfilling the original purpose and use cases of crypto, which are remittances and payments devoid of the typical speculative use cases surrounding traditional and modern finance.

Stablecoins have been hugely adopted in countries such as India, Nigeria, Turkey, and Latin America. Users in areas with struggling economies and inflation-hit currencies rely on assets like USDC as a store of value and for remittances. Thus, stablecoins fulfill the core premise of cryptocurreny.

Global Adoption of Stablecoins is a Positive Sign for Crypto

It’s no longer news that stablecoins have been adopted globally by both individual and corporate users. And this adoption could be good for the broader crypto market. Interestingly, some international Web3 firms have considered using USDC as a means of settlement for their employees.

Research carried out in 2021 showed that merchants were open to the idea of assets such as USDC as a medium of settlement. Additionally, payment providers such as Visa, Mastercard, and Stripe have all made investments in stablecoin payments.

Also, as Hansen noted in his thread, international organizations like the UNHCR have adopted payment stablecoins for “corruption-resistant, instant, and low-cost financial aid programs in war- and conflict-affected regions like Ukraine.”

These are all different ways to show the global recognition these stable assets have enjoyed despite the bear market. Although investors might be reluctant to invest in cryptocurrencies, they view stablecoins as a safer option.

Global regulators are already working out a regulatory scheme. All things considered, regulators see stablecoins as a growing asset class. Regulators have no intention to ban these assets. They just want to control the market. However, the recognition is good for crypto.

Stablecoins, as mentioned earlier, already have global relevance as a payment instrument and are used for remittance. From all indications, stablecoins will go mainstream. The Bank of America predicts that stablecoin adoption as a payment method will soar in the next couple of years.

Conclusion

People seem to forget that the initial purpose of bitcoin was to establish a distributed, decentralized payment system. Stablecoins are fulfilling that role. Stablecoins have the perfect use cases to integrate with popular financial institutions. So, they could be crypto’s ticket to global relevance.

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