What are Stablecoins? All you need to know about this cryptocurrency

A stablecoin is a cryptocurrency which is used to reserve asset like a fiat currency, commodity or other cryptocurrencies. It is a tokenized version of the assets and it facilitates seamless pass transactions, improved arbitrage and value exchange.

* Sometimes it is referred to as a utility token because it allows the particular user to buy and sell on decentralized exchanges, and that do not accept fiat currencies.

* This can be used in the process of centralised exchanges, how because the currency takes a longer time to process whereas tokenized form makes them to quick process.

* It is a type of cryptocurrency usually tied to the dollar or a commodity such as gold.

They are classified into:

- Tether (USDT)

- Dai (DAI)

- Binance USD (BUSD)

- TrueUSD (TUSD)

- USD Coin (USDC)

- TerraUSD (UST)

- Digix Gold Token (DGX)

How safe are these currencies?

* The significant part of the stablecoin is, it do not fluctuate much because it is natural currency, unlike crypto coins which makes price fluctuation and volatility.

* Stablecoins can provide much contract stability to both side of the parties.

* These kind of stablecoins are not created by a central authority. The company can issue tokens by depositing an equal amount of a fiat in the reserves.

Staking such coins is like locking or storing tokens within a network so that they can contribute later to validating transactions. The owner, who is unable to access the assest for a period of time would be rewarded with fresh tokens in return.

Are stablecoins legalised in India?

* When it comes to stablecoins in India, the RBI has concerns over it, as this form of digital currency is being used globally in money laundering and drug related payments.

Which is the first bank to mint stablecoin?

Australia and New Zealand Banking Group (ANZ.AX) said on Thursday it carried out an Australian dollar stablecoin payment, in a landmark transaction to become the first Australian lender to mint a digital asset linked to the country's currency.