AtoZ Markets – The Decentralized Finance (DeFi) revolution has grown mainly in part to the adoption of stable coins. The introduction to the world of cryptocurrencies and tokens was a giant step in the history of finance. They did, however, have a significant drawback, they are highly volatile assets that swing daily and even hourly in their price. This was not a good characteristic for most investors.

An Introduction to Stable Coins

Enter the stable coins. These are assets pegged to a real-world good such as the USD dollar, a basket of currencies, gold, silver, etc. They can also be crypto collateralized assets where the price stability is achieved by a group of cryptocurrencies used as collateral.

This results in a coin or token (for a detailed explanation of the difference between coins and tokens, read all you need to know about investing in coins vs investing in tokens) that is stable and retains all of the benefits of the blockchain. This opens the possibility of these assets becoming a widely used store of value and medium of exchange—two of the three major characteristics of money.

Their growth has been nothing short of explosive. In just 2021, their combined market cap reached 7 billion dollars. They are perhaps the fastest-growing sector of the crypto economy as of now, and they show no sign of slowing.

This means big things for India. The country has many markets and the introduction of stable coins could revitalize them. Some of them are;

Remittances

On average, Indians receive sixty-nine billion dollars in payments each year. This does not come as a surprise as millions of Indians live outside the country and regularly send money to support the family at home. Yet, this figure has plateaued in recent years as high costs eat away the original amount. Here stable coins and the low transaction fees of blockchain can make a huge difference in the remittances market.

Peer-to-peer marketplaces

As the ban of cryptocurrencies by the Indian government, p2p has been one of the few viable ways to buy crypto. It poses a problem, though, as the transaction is waiting for confirmation by both parties, price movements can negatively impact the buyer of the crypto. This is because most cryptocurrencies are very volatile and can move up or down in minutes. Here, transactions in stable coins would eliminate this risk for both parties. An example of this is Remitano.

Small e-payments

As the world, and India, move to a cashless society small money transactions suffer. Many online payment processors charge large fees, and this makes a small number of transactions less viable. Here stable coins become invaluable as they run on the blockchain and can be transferred with meager fees for any amount of money.

5 Best Stable Coins in 2021 for the Indian Market

Every passing day sees the creation of new stable coins. Below is a list of the best stable coins of 2021 for the Indian market and the ones at the forefront of the innovation.


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