The crypto scene was in shock as USDC de-pegged for the first time. Stablecoins were supposed to be…stable. However, it seems that market risks still affect even the mightiest players in the crypto sphere. If you have some USDC tokens still in your wallet, it might be a good idea to look for other stablecoin alternatives. Here are our top 3 stablecoins to buy instead of USDC.
What are Stablecoins?
Stablecoins are a form of cryptocurrency that is intended to keep its value steady in relation to a certain item or a basket of assets. This is accomplished by tying the value of the stablecoin to a specific item or class of assets outside of the stablecoin, such as fiat money (such as US dollars), gold, or other cryptocurrencies.
Stablecoins’ value does not vary significantly like other cryptocurrencies like Bitcoin or Ethereum since it is based on the price of the underlying asset. Stablecoins are more appropriate for ordinary transactions because of their consistency, which also makes them an effective instrument for hedging against market volatility.
Why did USDC Crash?
The shutdown of Silicon Valley Bank over the weekend severely disrupted the crucial infrastructure supporting the bitcoin market. As the bank was shut down because of its links to cryptocurrencies, investors rushed to relocate their money, which caused significant volatility in stablecoin values and skyrocketing transaction costs. In the same week, a second bank with a cryptocurrency connection failed.
To address the collapse of SVB, Treasury Secretary Janet Yellen held a meeting with important banking authorities. The episode wreaked havoc on the cryptocurrency markets, showing that the already protracted period of price declines has now progressed to a more serious level.
Top 3 Stablecoins to BUY instead of USDC
#1 Binance USD (BUSD)
Binance USD (BUSD) is a stablecoin, which is a type of cryptocurrency that is designed to maintain a stable value relative to a specific asset or basket of assets, typically a fiat currency like the US dollar.
BUSD was created by Binance, one of the largest cryptocurrency exchanges in the world, and is backed 1:1 by US dollars held in reserve. This means that for every BUSD in circulation, there is an equivalent amount of US dollars held in a reserve account.
#2 Tether (USDT)
Tether (USDT) is a stablecoin, which is a type of cryptocurrency designed to maintain a stable value relative to a specific asset or basket of assets, typically the US dollar.
Tether is issued by Tether Limited, a company that claims to hold reserves of US dollars, euros, and other assets equal to the number of USDT tokens in circulation. The company states that each USDT is backed 1:1 by a corresponding US dollar held in reserve.
Tether was created to provide a stable, digital representation of the US dollar that could be used for trading and transactions within the cryptocurrency ecosystem. It can be used to buy and sell other cryptocurrencies on a variety of exchanges, as well as to purchase goods and services from merchants that accept USDT. Despite previous controversies, critics failed to confirm the company’s plans to engage in market manipulation.
#3 TrueUSD (TUSD)
TrueUSD (TUSD) is a stablecoin, which is a type of cryptocurrency designed to maintain a stable value relative to a specific asset or basket of assets, typically the US dollar.
TrueUSD is issued by TrustToken, a company that claims to hold reserves of US dollars equal to the number of TUSD tokens in circulation. The company states that each TUSD is backed 1:1 by a corresponding US dollar held in reserve.
TrueUSD was created to provide a transparent and trustworthy stablecoin that could be used for trading and transactions within the cryptocurrency ecosystem. It can be used to buy and sell other cryptocurrencies on a variety of exchanges, as well as to purchase goods and services from merchants that accept TUSD.
One notable feature of TrueUSD is its legal and regulatory compliance. The company claims to work with third-party accounting firms to regularly audit its reserves, and it has obtained licenses from multiple US states to operate as a money transmitter. This regulatory compliance may make TrueUSD a more attractive stablecoin option for users who are concerned about the potential risks and uncertainties associated with other stablecoins.
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