Is Stablecoin a Revolution or Madness?

The number of stablecoins is increasing unstoppably every day around the world. Is this a revolution or madness?

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Introduction

In this article, we decided to examine the stablecoin market. Recently, the cryptocurrency market has been flooded with stablecoins at an incredible and dizzying pace. Leading stablecoins such as USDT (Tether), USDC, and DAI have been appearing in the cryptocurrency market for over three years. USDT (Tether), in particular, has been charting the path for the cryptocurrency market with its market dominance. Numerous stablecoins have been launched at a rapid pace in recent months. So, what will be the outcome?

The Stablecoin Revolution

A long time has passed since the cryptocurrency market was first born. During this time, the market has found new forms through numerous developments and changes. Initially, buying and selling transactions in the cryptocurrency markets were generally conducted in BTC pairs. Calculations were made in satoshis, the smaller unit of Bitcoin. A satoshi is a unit equal to one hundred millionth (0.00000001) of a Bitcoin. In other words, one satoshi is one hundred millionth of a Bitcoin. This was inevitably tiring and challenging for investors. Profits and losses were recalculated using the BTC/USD conversion.

Later, USDT (Tether) entered the cryptocurrency market as a stablecoin, with a 1:1 peg to the US dollar. Over time, USDT gained acceptance in cryptocurrency markets (stock exchanges). USDT trading pairs virtually dominated the stock exchange market. Now, investors could analyze profits and losses without having to worry about other accounts. USDT found a place not only in spot markets but also in margin and futures transactions. This development truly fueled the growth of derivatives markets.

This was a stablecoin revolution. Subsequently, stablecoins like USDC and DAI found their way into the market. During this period, the collapse of the LUNA algorithmic stablecoin, USTC (TerraUSD), shook the markets but did not wreck them. Stablecoins in the cryptocurrency market continued to strengthen.

Stablecoin Madness

In recent years, the trillion-dollar market and global competition have continued to grow rapidly. The cryptocurrency market, which recently reached $4 trillion, continues to grow. It is estimated that the US dollar-pegged stablecoin market could reach $1.2 trillion by 2028 due to comprehensive crypto regulations in the US.

In the last six months, many corporate firms have begun launching their own stablecoins. The latest example comes from Metamask. The renowned cryptocurrency hot wallet developer Metamask has announced plans for a stablecoin called mUSD. In a global race, many corporate firms are experiencing a frenzy of stablecoin issuance. In recent years, private stablecoin issuers like Tether and Circle have become among the largest buyers of US government debt, surpassing countries like South Korea, the United Arab Emirates (UAE), and Germany.

This is practically a stablecoin craze. Mica regulations in Europe and the development of a comprehensive regulatory framework for stablecoins in the US are accelerating this race. Dollar-denominated stablecoins have dominated the market so far, but other countries are considering issuing their own stablecoins.

Conclusion

Recent developments indicate that dozens of stablecoins will enter the cryptocurrency market in the coming period. They will be pegged 1:1 not only to the US dollar but also to the European Union currency, the euro, the British pound, and many other fiat currencies. The stablecoin sector is growing, and other countries are signaling their participation in the race. So, what will happen in this process? Will stablecoins experience major crashes like TerraUSD? This rapid rise also carries high risks. The continued growth in numbers will reveal whether stablecoins are a revolution or a fad in the future.

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