Topic: Is the market saturated with too many stablecoins? (Read 462 times)

Agree. The more stablecoins on the market, the greater the competition will be. I'd imagine that renowned banks will launch stablecoins of their own for the whole world to use. COVID-19 has just increased the popularity of crypto/Blockchain tech, so I wouldn't be surprised to see more stablecoin offerings in the future. As far as centralized stablecoins go, I would think twice before putting all my hard-earned money on them. Apparently, stablecoins like USDC and USDT are too centralized to the point where the stablecoin issuer can freeze your assets on the Blockchain. Centre has already done this a while ago (link to article), while Tether has followed suit (link to article). It shows us that most centralized stablecoins are subject to a single point of failure, effectively bringing traditional banking to the Blockchain (Banking 2.0).

Considering that centralized stablecoins are too vulnerable towards manipulation, I'd say that decentralized ones could take the world by storm in the future. As far as I know, there's only one decentralized stablecoin backed by decentralized crypto assets. And that one's called "DAI". The market may be saturated with centralized stablecoins, but it's in need for more decentralized options. Believe me, once people face the same situations as traditional banks by using a centralized stablecoin, they'll leave the game. Blockchain tech is all about decentralization than anything else. While at some point regulation is necessary for the industry to thrive, sometimes it's taken too far than usual. Time will tell us whenever stablecoins have been a failed idea or all the other way around. Just my thoughts

True! I can't think of any negative effects of stable coins backed by real money for the cryptocurrency world. The problems of fiat-backed stable coins stick with the problems of its own countries. The cryptocurrency market is considered as the most independent market that doesn't rely on any particular national economy. That's why it's expected to be a worldwide currency. Therefore, nothing to worry about when there are more stablecoins in this market.

Stable coins created by respective countries have border restrictions so it won't affect the adoption of centralized stable coin like tether, the only problem will be the coin will be burst at some point due to excessive printing of them with no limitations.

Agree! I don't think the existence of stable coins in the cryptocurrency world will harm our market. Otherwise, many fiat-backed stable coins on the market can give traders more choices in investing and exchanging their money based on the differences in the exchange rate. I would doubt if a trader worries about the appearance of stable coins, isn't it beneficial for us?

I don't think anyone in crypto would need to be worried about that.
Already the biggest volumes are with direct pairs with USD. Any deviation from actual FIAT is in my opinion a good move. Pegged currencies of course aren't a great improvement but at least they are not a direct endorsement of the bank system. Some of them are even more centralized and trust based too! But that's why it's good to have currency competition.
The more stable-coins there are, the more competition there will be for better products, and the more pressure on banks to be more accepting of crypto or lose deposits to their competitors.

Good point. DAI could go down the drain if ETH's price goes all the way to zero. Based on this flaw, centralized stablecoins would work better with Fiat reserves instead of being backed by a highly-volatile cryptocurrency on the market. Personally, I'm not quite a fan of Tether because of its lack of transparency. Yet, people seems to use it more than anything else because it's the biggest stablecoin on the crypto market. The Tether company might be artificially pumping its token to keep it on the top spots in market cap. If its bubble bursts someday, it'll be a huge blow to the entire crypto market as we know it. There are far better options to choose from which have a greater level of legitimacy than Tether itself.

For instance, Gemini Dollars and Binance USD are widely regulated in the mainstream world. They're backed by reputable crypto companies in the Fintech space, unlike Tether USDT. Regulation is what is needed in order to keep the industry as legitimate as possible. There may be many stablecoins on the market right now, each with their own level of legitimacy. I think it's better to have lots of stablecoins on the market in order to ramp up the competition. The more stablecoins there are, the more options will be available for everyday people. The same could be said to traditional altcoins on the market. Time will tell which stablecoins will remain in the space and which will fade into oblivion. Only those that keep their promises will be actively used in the mainstream world. Just my thoughts

We need to figure out which stable coin to use. In addition, now about 80 percent of all states are working on the creation of their national stable coins, that is, their digitized currencies. Their use will be much safer. Private and commercial stable coins will disappear much more often what is the default of the state.

If anyone knows how to use stablecoin like USDT, you know how to make money on exchanges. Its not just USD that is pegged these days but also the other fiat currencies like Yuan and Ruppee. AS long as exchanges are using these stablecoins, it will appear like its safe to use them despite being unaudited.

Tether.io can print more USDT though and then use it to buy BTC when the price drops then it's going to be a huge profit for them. There has to be reserve auditing for these stablecoins because they are not like DAI.

Yes, competition will facilitate development.
When stabecoin projects compete fairly, we will know which projects are good and which are of poor quality. Besides having more competition will increase the choice for everyone.

In fact, there are too many stable coins being launched in the market and people cannot know them all. However it is necessary and good for everyone and for the cryptocurrency market, competition will see development projects and investors benefit from that.

Having Many stable coins in crypto market won't do any damage, some will definitely fail but I prefer transparency stable coin projects like USDC which is from Coinbase and BUSD which is from binance team

Nope, the raise of stablecoins is getting scary lately with usdt  minting new tokens without control. i wasn't happy when Tron joined the Usther blockchain. they will mess the whole thing out of control. USDC is my preffered choice because it has a solid transparency and a redefined structure.

But how can we actually trust every stable coin which is backed by USDs even the project tether is printing more money and injecting them into the crypto market which will surely affect the prices of altcoins because USD value is getting diluted here in the form of stable coin.

I agree that in recent months a lot of cryptocurrency companies have created stablecoins for various reasons, and it is not clear whether this is good or bad, but we will continue to monitor the cryptocurrency market and later it will be more visible what this will lead to.

Even if the number stable coins reach 1000 it won't hurt crypto at all, the use case of stable coins is to backed your assets at 1:1 USD price which is very useful for traders, you just have to decide which one you've prefer between centralized USD coins or decentralized USD coins

Definitely the main function of these stablecoins. Otherwise, these thing won't be a thing, these stablecoins couldn't even hold a candle against other cryptocurrencies in acceptance among online ecommerce for payment method. If a stablecoin couldn't save the money of people from fluctuation then it's as good as a ripoff coin.

In my opinion, there are already a lot of alternatives.  Stable coins are exactly the assets that have saved the deposits of many traders. I speak from experience))

inspected by authorities really ? i didnt know that its possible here on this space but i though all here are online and not being monitored by some authorities  but there are so called detectives that tracks down fraudster . its normal that theyl be transparent and show thier supply or other info because how will the people know or invest  if they wont show thier details . in the crypto world anyone can create a coin and yes its easy money if investors invest on it or if your good at promoting/scamming  .

usually a reliable stablecoin will usually have their asset published transparently they also might have been inspected by the authority but to further prove its actually more complicated than that and its true that these stablecoin is easy money, if it's not then why there's so many stablecoin keep appearing each day.

I don't see any danger having too many stablecoins in crypto space, some will be good and some will be bad and I'm pretty sure that people like going for the best stablecoin in terms of marketcap which is why USDT still have upper hand till date, you just have to choose, you don't care about centralized then USDT is the best, if you want something more secured? Then find decentralized stable coins

To be honest I am really suspicious of these stablecoins especially USDT which I keep seeing they have minted a huge amount of dollars several this year and in previous years. I have a question on my mind do they really have that amount of dollars deposited somewhere on a bank? There is no proof to support that. It is an easy money I guess no doubt big companies like binance, coinbase, etc. are creating their own stablecoins.

It is.
I don't think there is a necessity for too much stable coins to be created.
Why not just 1 or a couple of it also for other field of industry if they really dislike altcoins and bitcoin.

Whales are the only ones which are really making a good use out of it.
Big profits from trading using stable coins as a safe haven.

Seriously stablecoins for long term? In my opinion, these stablecoins are used in order to save from inflation of major coins. I dont think many investors are investing with it, unless like other stablecoins offering a lending services that pays them with profitable interest aside from that, I dont see they can earn huge profits even they hold huge quantity of these stablecoins.

because tether (usdt) is the first stable coin so it will be difficult to get others to use other stable coins that are safer or clearer ownership, from the beginning of the year until now maybe the tether is the largest daily volume of coins, and even beat BTC, and I'm also curious if indeed the tether mentioned can disappear or a scam suddenly occurs, what impact will be caused on the market.

Fiat cryptocurrency?

Other than the stable coins that have the value of most fiat currencies, what's that fiat cryptocurrency?

Well that come to show that they're somewhat shady with that but having the market flooded with many stablecoins somewhat give a sense of competition thus giving us benefits of having an even better stablecoin than what we have currently. I don't mind at all that even if there's 10000 stablecoins being created in the future, after all the choice is ours and there's no one to force us to use them.

Most people actually invest with stable coins for their long-term investments, they hope the value their assets will be maintained without price fluctuations like other Crypto prices. I think, with a lot of stable coins appearing on the market it will be fine for Crypto world.

Stablecoins are cryptocurrencies designed to maintain a stable value against an asset or fiat currency. Most stablecoins on the market use the US Dollar as their reference point, and are supposed to be valued as close as possible to $1 at all times. Although their price can theoretically be linked to anything, in practice they are most often pegged to major fiat currencies.

Doubts sometimes arise in relation to private and commercial stable coins. Soon there will be even more stable coins, since now about 80 percent of all states are developing their own national stable coins, that is, the digitized currencies of their central banks. They, in my opinion, will have less risk for users and will be in greater demand in comparison with private stable coins.

IMO, it's not fine anymore.
Too much competition is not good for the market anymore.
Transparency, privacy, centralization, or whatever reason it may be. It doesn't matter. It should have not come to this.
What I am seeing is just reasons for pure profit.
They saw other stable coins making money out of their project and so they follow.

Audited? How about tether that failed to transparently show how they minted their tokens? As far as their reponse go, its not really that acceptable. Im sure their project is really good as tradera love trading pair with usdt but we can always choose safer and more reliable stablecoin like Dai, I dont mind market having too many stablecoins actually it helps as optiom for other investors.

But the truth about these stablecoins is that not all of them are disclosing the real truth of their assets. Do they really have those assets at any given period of time? Maybe, stablecoins are good for short term purposes but long term? I don't think so. Once the management backing this stablecoin collapses, you have no way of recovering your assets.

This is about how good the competition between all of the stable coins that are exist in the market. As long as these stable coins are fully audited and there was no problem with it and it can be considered as a new money for crypto too.

The market is saturated with not only stable coins, also defi stable coins! This is similar to the market's saturation with ICO tokens on 2017, I reckon and this might lead to a mass extinction of altcoins.

We have to get other options so we can differentiate and know what's better for us. Yes, there's a lot of manipulation on Tether whether they admit it or not but we know its happening. If there's so many stablecoins then at least we can have an assurance to make money while the market is full of risk.

If there's more stablecoins to come, maybe many businesses will adopt it since we know the problem on a slow production is simply because of the high volatility, that prevents them to adopt.

Competition is always nice, it's better to have multiple coins than just Tether dominating this field without anyone to keep them on their toes. Just like with the rest of alts and tokens, the market will sort it all out in the long run. There will always be at least a few coins, because relying on just one stablecoin sounds risky - what if Tether will decide to go rogue and we'll have no plan B?

I had some experience with DAI and it was generally positive. Same goes for Tether. I think smaller stablecoins, especially those backed by smaller currencies, aren't very useful, because people generally prefer US dollar over a weaker fiat currency.

I think we have to look at what's the real purpose of stable coins in the market? Will it bring that "stability" or will it make us confused more with their usage, specially noobs in the market. And we all know that the number 1 stable coin today has a lot of accusations of manipulations in the past. Obviously, Tether and Bitfinex has denied and said. that this is baseless. But if this stable coins allegedly is playing the market around then we might need some alternatives.

I do not about others but for me usdt and usdc are enough, i was using usdt to trade from longtime but the difference now is i have started using usdc as well, it is good to have options but too many stablecoins will mean too many same projects that will not serve the purpose because the solution is already there in the market so why not do something unique.

Just as there are many altcoins even in cases where there are repeated ideas same is the case with stablecoins, each of these stablecoins believes they can offer something better and different while in reality, they are all the same. In the case of USDT, yes it is the top stablecoin with huge number of users despite having questions which begs for answers; however I do think that why most people likes Tether is owing to the fact it has huge volume and if course hype. Lastly, yes the market is saturated with many stablecoins and I don't think there is anything that can be done about it other than being careful of the ones we associate with.

Usdt remain the top rank and there has been so many backlashes about bitfinex minting the usdt. I created post similar to this a few weeks ago and the replies I got makes me realized it is not advisable to keep holding this stablecoin as users can lost their holding if this stablecoins go sour. We know people use them to mitigate the lost due to market volatility but they do not represent the real feature of cryptocurrencies.

in my opinion stable coins are useful to be able to maintain a certain balance on the various markets apparently all the big exchanges have their own but in my opinion it's okay this way

The popularity of stablecoins are gaining big supporters that a lot of crypto projects are directed to it. They don't have the volatility similar to other crypto assets like bitcoin and other altcoins, that is why stablecoins have become popular in the digital-currency industry. I do though agree that they are getting saturated in the market, stablecoins stabilize an otherwise volatile cryptocurrency ecosystem.

will be stable if the number of other coins continues to grow, so everything will be balanced but if the stable growth of the faster coins will probably have an impact on the market, of course usdt be the top because it becomes the first stable coin.

Actually depends on the users. Most traders will still pick USDT cause most every exchanges support tether, I think some stablecoin are also good but there are too many other projects releasing their own stablecoin. Specifically Binance, which releases a lot of stablecoin per countries supported.

There are other stablecoins like fiat cryptocurrency used in other exchanges its not that it is not needed but it is prefer of course by other trader that convenient for them to use it.

With more numbers, we would have better options. As you already stated, Tether is the most used stable coin but it's been pointed out several times that Tether is issuing coin without having an equivalent escrow holding of USD. This makes it an unsecure option, yet people are using it. It's mostly because they can't find a better solution. For a truly stable coin, it should be backed by the thing it's pegged on. USD stablecoin escrowed with Ethereum don't make sense. What if ethereum go zero overnight?

There is no need for more stable coins. We've got plenty of them trying to get as much as volume that they want. The Gemini dollar, the USDC of Coinbase and soon we'll see more of the CBDC type of cryptocurrency which goes down to this category.

The 2017 pump has something to do with Tether and I think in the nearer future, these stable coins will play a factor for the next bull run.

Seems like Tether has basically made other stable coins obsolete. If something happens to Tether like not enough backup assets or trust issues, then it will be quite bad for the industry.

I dont think stablecoins will make the market saturated , its like hedging funds in fiat. What matter is having a huge number of altcoin. This makes Bitcoin hard to grow. Imagine you are buying Bitcoin but dumping it to buy an altcoin and joining ICOs.

Well it is a free market and like hundreds and thousands of crypto coins we may also see a lot of stablecoins in future because every big company will be launching their own stablecoin and also do not forget about the official digital currencies that many countries are working on they will also be like stablecoins we already have in the market.

The market is fine with so many stable coins. With many stable coins around the market, people would have many options that they can choose to save their money value. I don't think that the market is saturated with too many stable coins because I think that can be a hard competition between each stable coin. We will see what people choose with so many stable coins, and maybe with that, we will know what stable coin which will be worth holding for the money value in any situation.

Almost every stable coin has the same use case which is for using trading that is the reason why people choose tether which got huge marketcap so the traders won't have any difficulties on liquidating them.But it has no real use in the crypto market, probably people can claim it has stable value so it is suitable for day to day life but its actually have no difference with the current fiat digital payments.

I've noticed an increase of stablecoins on the market over the past few years. There are now many different types of stablecoins for USD, EUR, and other top Fiat currencies in the mainstream world. Some of them are legit, while others are just pure hype (scam). To my surprise, Tether (USDT) is the top stablecoin in market cap. For a company which often lacks transparency of its USD holdings, I think that Tether is just an over-hyped coin that will see its bubble burst real soon.

As far as other stablecoins go, I believe that people will only choose those that are on the top ranks in market cap. I wonder if so many stablecoins are actually needed or necessary for the blockchain industry to thrive? Do you think that the market is really saturated with too many stablecoins? Or is it still fine?

What are your thoughts?