- Over $1.3B in st$1.3B in stablecoins held on Binance
- Approximately $3B in stablecoins across top cryptocurrency exchanges
According to Messari, a crypto data firm, over $3B in stablecoins sit on exchanges. Furthermore, over $1.3B in stablecoins are held on Binance alone.
The influx in stablecoin holdings can be attributable to the market-wide crash last month. Traders liquidated their cryptocurrency assets into risk-averse assets, such as stablecoins. Stablecoins are pegged to a centralized currency and thus, theoretically always hold value.
With crypto traders liquidating into stablecoins rather than fiat, it is likely that traders do not want to exit crypto permanently. This is good news for the cryptosphere and blockchain adoption.
Rise of Stablecoins
Furthermore, stablecoins have seen a recent surge as institutions and governments research stablecoin uses in international finance. As reported by The Crypto Associate earlier this week, the World Bank is digging deeper into stablecoins and how they might play a growing role in international finance.
Furthermore, amid COVID-19, countries have prioritized the development of a central bank digital currency, CBDC. Put briefly, CBDCs are stablecoins backed by the country’s national currency.
CBDCs offer numerous benefits as they utilize blockchain technology while alleviating the price volatility of cryptocurrencies.
Moreover, central bank digital currencies are especially attractive during times of uncertainties, like COIVD-19. CBDCs offer immense scalability and transaction throughput. As a result, CBDCs can eliminate transaction delays and offer quick transactions when traditional banks are operating at limited capacity.
Furthermore, CBDCs offer 100% transparency ensuring that all transactions are accurate and unbidden. Amid COVID-19, CBDCs will ensure that stimulus funds are used appropriately and not siphoned off for personal gain.
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