Stable coins have been taking off in the cryptosphere in recent years. Basically, a stable coin is a cryptocurrency backed by a real-world asset held in reserves, such as the U.S. Dollar or gold. Recently, more and more assets have been used as backing for stable coins. So, we’ve gathered up some of the new contenders that have been gaining traction and some of the old guard to make a list of stable coins to keep your eye on in 2022.
1. Binance USD (BUSD)
Binance launched its stable coin in December of 2019, making it a relative newcomer to the stablecoin scene. Especially for having a market cap of about USD 12 billion, its done impressively well for itself. Perhaps one should expect as much for a cryptocurrency launched by one of the world’s biggest cryptocurrency exchanges.
Binance offered its BUSD coin as an attractive bid to its new users looking to get into the crypto world in a relatively safe and secure way. Cryptocurrencies, in general, are infamous for their volatility, but a stablecoin like Binance USD pegs its value to the U.S. Dollar to undergird that volatility.
That, on top of being the biggest platform for cryptocurrency exchange in the world, got BUSD off the ground running, and it will likely continue to climb as we head into 2022 and more users join.
2. Silver Coin
Gold backed stable coins have been around for a while now and enjoyed some popularity for the global store of value gold represents. Silver Coin seeks to do the same with silver. Launched in 2019, it has gained a moderate audience and presents a different opportunity space than many other stable coins due to silver’s slightly more volatile nature.
Whereas most stable coins use their underlying assets solely to remain as stable as possible, silver tends to have stronger ups and downs due to its industrial uses and the smaller market size. As a result, the decisions of just a few large entities can swing the price of silver.
Silver Coin is built on the Ethereum network and represents a fractional amount of physical silver. Each token is worth 1 / 100th of an ounce of 99.9% pure silver, exchangeable in the form of silver bars. This means you can buy silver through it in relatively small fractions, allowing smaller investors to divide up their investment better than if you were to try to buy silver bars straightforwardly.
Silver Coin also stores its silver in secure vaults that are audited regularly with a camera feed you can view online. This is an important move in the future of stable coins as it promotes the security of the underlying reserve and transparency in monitoring it.
Moves like these indicate the Silver Coin has a chance of being in the vanguard of new ideas for stable coins as we head into next year.
3. TerraKRW (KRT)
A unique stable coin on this list, the underlying Terra protocol that runs TerraKRW is a tried and true network in the stable coin space.
Out of all the different fiat currencies Terra uses, the Korean Won has gained the highest traction, with a market cap of at least 80 million USD as of writing, despite being around for only one year. This is partly due to Terra being a company founded in South Korea, thereby knowing how to cater to its home audience and provide them a great user experience.
Terra uses its Luna cryptocurrency token to help keep its stable coins balanced using an interesting system. Essentially, suppose a certain stable coin, let’s say the TerraKRW, starts to gain demand and increase in value. In that case, they will offer users the ability to convert some of their Luna tokens into TerraKRW tokens to increase the supply.
Terra’s growing popularity in the Asia-Pacific region could eventually reach North America and Europe if these innovations prove successful.
4. Tether (USDT)
Finally, we would be remiss not to mention Tether, the top stablecoin for keeping crypto markets liquid for the last year.
Tether is a bridge between fiat currency and crypto, whose goal is to remain as stable and ‘tethered’ to the USD price as possible, offering stability, transparency, and lowering transaction charges for those looking to convert their other cryptocurrencies into fiat currency.
Due to its success has remained the primary stable coin used for this purpose and will likely continue to do so in 2022.