Top 13 Stablecoins of 2020 and Their Role on Crypto Market
We know that the idea of cryptocurrencies is the total replacement of fiat money. However, being ever-volatile, altcoins aren’t always a good solution for investment and storage. That’s why another type of digital currency was created – stablecoins.
Why Stablecoins Matter?
Imagine that fiat money (papers that lose quality and have to be reprinted) is no longer a physical phenomenon, gets 100% digital and is protected against inflation. That’s what stablecoins are about. In layman’s terms, stablecoins are the digital currencies pegged to the cost of fiat money, or any other asset. Ideally, stablecoins price equals the cost of the corresponding fiat (for instance, $1).
As we mentioned above, the value of such coins is tied to traditional assets (money or other values) in a ratio of 1:1. This ratio is maintained throughout the life of the coin, regardless of market conditions. Price fluctuations up or down are possible, but they are insignificant.
However, the position of stablecoin directly depends on the situation with the asset that supports it. For example, if the dollar rises in price, the value of the coin tied to it will increase. If it goes down, then it will also drag the digital analog down.
Stablecoins are divided into 3 groups depending on the method of stabilization:
Fiat-collateralized: supported by fiat money or physical values (Tether, TrueUSD);
Crypto-collateralized: the price is tied to the value of other cryptocurrencies (Dai);
Non-collateralized: the price is regulated by the issue of coins, but at the same time it is not supported by either traditional money or other cryptocurrencies (Carbon, Havven).
There’s a growing number of stablecoins with the price pegged to gold. For instance, the value of Ethereum-based DigixDao cryptocurrency is backed up by golden coins stored in Singapore banks.
List of Top 13 Stable Crypto Coins
Without further ado, let’s review best stablecoins 2020 and compare them for you to see which variant is more reliable and attractive. Our list of stablecoins includes currencies pegged to US dollar and other assets.
#1. Tether (USDT) – The Largest Stablecoin on the Market
The idea of the stablecoin created by Tether company was born long ago as in 2012! After being listed in exchanges in 2015, Tether has become one of the most popular and successful assets on the market being a quick and cheap way to transfer value from one exchange to another, without the need for using “unstable” cryptocurrencies.
The convenience of Tether, as well as the fact that stablecoin was a substitute for the US dollar, appealed to both stock magnates and ordinary traders. Everyone simply used this payment instrument, not thinking about whether it was actually backed up with dollars or not.
In early 2017, USDT authors began to “print money”, as traditional banks in the US and other countries do. At first, they stated that they would not increase the money supply of stablecoin. But then they did the opposite, allegedly printing Tether for the sake of increasing the price of BTC in mid-2017.
Only after a significant number of fraud allegations hit Tether in mid-2018, the price of the asset fell from $ 1 per token to 85 cents. It failed because Tether sharply increased the number of tokens in the circulation, making it jerky until the market capitalization reached billions of dollars, whereas initially, Tether had only a couple of tens of millions. Being the stablecoin market monopolist, Tether started releasing USDT coins without being really backed up by the equivalent in the US dollar.
USDT can be instantly purchased with a credit card (Visa, Mastercard), bank transfer, and Apple Pay on Changelly.
Despite all accusations, Tether stays the king in stablecoins list and is widely used by traders. According to Wall Street Journal, about 80% of all BTC trading is done with the help of USDT, so this stablecoin ensures liquidity on the crypto market.
Mechanism of stabilization: Each USDT Collateralized token has a corresponding $1 U.S. invested in an owned account
#2. TrueUSD (TUSD)
At the moment it is one of the most reliable and proven stablecoins, as the company creating it has an open and transparent policy. The first independent audit was conducted on March 1, 2018, proved that almost $ 1.8 million is actually backing up TrustToken reserves. Today, TUSD ERC-20 token is the best stablecoin on Binance and its price keeps at $1 level.
At the moment, 100% is secured by US dollars on legally protected escrow accounts with several partners of the bank so that you can trade, send and receive payments with peace of mind.
How does TrueUSD work?
Buyers pass the KYC / AML check and send USD to the trust company with an escrow agreement. When they check your funds, their API instructs our smart contract to issue the equivalent TrueUSD to your Ethereum public address.
Buy TrueUSD on Changelly with Visa/Mastercard, bank transfer, or Apple Pay!
To redeem the US dollar, you transfer the KYC / AML check, send a smart contract with your TrueUSD tokens from the Ethereum registered address, and then the escrow bank will send you the funds. Your property on the account is legally recognized, and every 1 TrueUSD token you receive reminds of a redeemable certificate of ownership for $ 1 through escrow.
Mechanism of stabilization: Every TUSD token is backed by $1 U.S. held in an escrow account by third parties.
#3. DAI Stablecoin
Although the price of Dai stablecoin also equals $1, Dai is backed by Ethereum-based smart contracts with redundancy. Dai is stabilized by external market factors such as collateralized debt positions (CDPs), autonomous response mechanisms, and external economic incentives. Dai is more decentralized because only users can create and destroy the token (DAI tokens appear only after the deposit has been paid and disappear after payment of the debt).
Being issued on MakerDAO platform, DAI is more transparent and fair than Tether – all operations are run by the smart contract. 71th cryptocurrency by market cap, DAI proves to be efficient for betting, financial markets, international trading, and transparent audit.
It should be noted that Maker also gives users the chance to choose the collateral types:
DAI cryptocurrency can be purchased instantly on Changelly (credit cards, bank transfers, and Apple Pay accepted) as well as traded on a full-featured cryptocurrency exchange Changelly PRO.
Traded on: HitBTC, Coinhub, Etfines, Gate.io, DDEX, OasisDex
Mechanism of stabilization: For the generation of Dai tokens, users need to purchase and stake an equal value (in USD) of Ethereum tokens. When the cost of Dai rises, users will be incentivized to create more. If the price falls, users will be incentivized to sell their DAI back to the pool.
#4. USD Coin (USDC)
USD Coin is the stablecoin crypto created by Coinbase exchange and Circle company. It’s positioned as a stablecoin that has financial and operational transparency. The exchange of cryptocurrency for fiat is carried out in the Circle USDC application which emits cryptocurrency. All functions that users perform through banking systems are available in the application: conversion, money transfers and others.
This Coinbase stablecoin can be emitted by banks. Centre focuses on the global market and plans to attract more international banks for that. It partners with such companies as Goldman Sachs, Bitmain, Blockchain Capital and others.
Here’s one more proof of its success:
Buy USDC stablecoin with several clicks on Changelly. Pay seamlessly with a credit card (Visa, Mastercard), bank transfer, or Apple Pay!
Traded on: Coinbase, Poliniex, Binance, KuCoin, Okex, Bit-Z, and others
Mechanism of stabilization: Each USDC token is backed up by $1 the U.S. invested in an owned account. Circle company ensures low fluctuations.
#5. Paxos Standard Token (PAX)
This popular stablecoin was created as the alternative to Tether (USDT). PAX is traded in conjunction with other assets that are available on the site. In particular, you can use PAX to purchase or sell Bitcoin, Ethereum, Binance Coin, EOS, XRP, as well as Stellar Lumens. Being a ERC-20 token, Paxos ensures transparency. While PAX coins are circulating, US Dollars are held in reserve at FDIC-insured US banks and after redeeming, the PAX coins are destroyed.
PAX has become #39 coin in Top-100 cryptocurrencies. One of the main reasons for it is easy integration of Paxos payments: it’s a safe and reliable instrument for transactions. What else makes it superb?
Absence of transaction fees;
24/7 customer support Ethereum-based transactions;
Attestation by Withum company;
Full backing up by US dollar.
Paxos stablecoin has already gone through two audits, both successful: specialists of Nomic Labs claimed they revealed no issues.
For instant PAX purchase just click the button below. Buy PAX with Visa/Mastercard, bank transfer, or Apple Pay via Changelly.
Collateralized 1:1 by the USD, controlled and regulated by the NYDFS.
#6. Bitshares (BitUSD) Stablecoin
Having undergone serious price fluctuations (on August 12, BitUSD cost $125!), BitUSD stablecoin stayed on the market, and its creators continue improving the functionality of their asset. What makes it different from Tether? With BitUSD, you can be sure that its value is totally backed up by futures, fiats, gold, silver, and other assets.
BitUSD has the following advantages:
It’s a relatively reliable investment tool due to the predictable price of the asset and minimal volatility;
Hedging against sudden price action and sudden cryptocurrency market movements;
This unit of account is different from assets with capital gains or losses.
Collateralized 1:1 by the USD. Backed up by fiat, silver, gold, and other assets
#7. EOSDT: A framework for stablecoins
EOSDT token is the asset of Equilibrium smart contract platform that serves for creation of asset-backed tokens. To put it simply, it’s the world’s first decentralized stablecoin on the EOS blockchain. Every EOSDT is pegged to US dollar, but the most interesting part is collateralization. Users can generate EOSDT and choose the underlying asset! How does it work?
A user generates EOSDT tokens with EOSIO technology on the basis of the Equilibrium platform.
The collateralization options are chosen – they are settled in the smart contract.
EOSDT tokens can be used in any convenient way (for storage, crypto exchange, payments, etc).
Buy EOSDT quick and easy via Changelly. Pay with a credit card, bank transfer, or Apple Pay.
EOSDAQ, Newdex and DEXEOS have listed EOSDT as a stablecoin, so its adoption is in the progress.
Crypto-collateralized, or collateralized with any asset chosen
#8. Gemini (GUSD)
The Gemini Dollar (GUSD) is the result of a collaboration between the Gemini Trust Company (founded by Winklevoss twins), LLC and the New York Trust company. The token is pegged 1: 1 to the US dollar and built on the Ethereum blockchain in accordance with the ERC-20 standards.
GUSD was created as the direct competitor for the Tether cryptocurrency. Although the company was accused of non-transparent operations, according to Cameron Winklevoss, to date, none of the existing coins pegged to the dollar matches the true name of stablecoin.
Tradedon: Coinbase, Gemini exchange, Okex, Hotbit, Bitmart, and others
Collateralized: 1:1 by the USD, controlled and regulated by the NYDFS
#9. Binance GBP Stablecoin (BGBP)
On July 29, 2019 Binance has launched its own Binance stablecoin – Binance GBP. It’s pegged to Great Britain Pound, and is totally backed up by the money on company’s account. The token is based on Ethereum platform.
Collateralized: 1:1 by the Great British Pound, reserves are stored on Binance bank account
#10. StableUSD (USDS)
This cryptocurrency was created by Stably blockchain startup. StableUSD is secured by US dollars held by Prime Trust, an American regulated trust company.
According to the company’s blog, StableUSD uses a proven centralized model to fully back up each issued token. The emission process will allow the use of Bitcoin (BTC), Ethereum (ETH) or Tether (USDT). The transferred cryptocurrencies will be converted into US dollars in the free market through the intermediary of a third-party manager.
The corresponding amount in StableUSD will then be released and sent to the client through a smart contract, ForkLog reports.
Collateralized: 1:1 by the USD. Backed up by US dollars held by Prime Trust company
#11. Reserve (RSV) stablecoin
Founded by Silicon Valley investors, Reserve is a USD-pegged cryptocurrency that’s 100% collateralized by fiat money. What makes it different from the mass of other stablecoins? The underlying blockchain uses Reserve platform and RSR fluctuating protocol token that stabilizies RSV and confers the cryptographic right to purchase excess Reserve tokens as the network expands.
Reserve gives holders the opportunity to keep their assets safe and secure: the project creators position the platform as a great alternative to traditional storage in banks. Besides, Reserve is claimed to be a serious competitor to Libra coin, being more decentralized and transparent.
Right now, you can buy Reserve utility token – RSR (current price $0,0027).
In September 2019, Binance in partnership with Paxos issued another Binance stablecoin this time pegged to the US dollar. The fact that Binance USD (BUSD) is approved by the New York State Department of Financial Services (NYDFS) makes this stablecoin a trustworthy cryptocurrency to acquire.
Swift cryptocurrency purchase is already here on Changelly. Buy BUSD with Apple Pay, bank transfer, or credit card (Visa, Mastercard).
STASIS is the Euro backed stablecoin aimed to connect decentralized finance and the off-chain market. The EURS token is issued on the Ethereum blockchain as an EIP 20 token. EURS stablecoin is compliant under EU Nation – Malta Law.
While USD-pegged crypto assets are on the rise, there are a number of non-collateralized and crypto-collateralized currencies developing. For instance, Carbon and Havven stablecoins are getting more popular.
A curious idea belongs to creators of Neutral Dollar (NUSD): it’s described as a metastable basket that consists of underlying stablecoins to improve the liquidity of its constituents and offer users a lower volatility token (thus, it’s backed by other stablecoins).
Metal-based stablecoins are very attractive for investors seeking to buy assets with physical collaterals. For instance, 1 DGX (Digix Gold Token) represents 1 gram of gold on Ethereum: it costs around $48, and company’s market cap is $5 038 292. It allows users to buy golden bars on blockchain and trade DGX token on Ethereum platforms.
In the same manner, GOLDX token allows to get gold savings in three simple steps (currently, the application is in Beta version).
Another interesting stablecoin is Wrapped Bitcoin (WBTC): it’s an ERC-20 token backed 1:1 with BTC. This asset was created to be used on decentralized exchanges with a higher level of liquidity. Besides, it introduces smart contracts for Bitcoin making trading more transparent.
WBTC is ideal for trading, financial institutions, and dApps.
Facebook’s stablecoin Libra is also entering the market and it has all chances to set the new standards in the industry, if it manages to survive the hearings in the U.S. Congress. We’ll keep you updated on this continuous stablecoin war.
Following, we are waiting for the release of stablecoin from Telegram messenger. Although, it is expected that it will be actively used within the ecosystem of the Telegram, and not act as a universal stablecoin.
Also, we expect a possible release of an alternative stablecoin built on Ripple’s XRP coin.
Stablecoin Wars Bottom Line
It’s hard to select the best stablecoin in 2020: each asset has its pros and cons. Although Tether is the most popular asset of its kind, it’s far not the most reliable one – in 2018, numerous safer alternatives appeared on the market. Below, you can check the stablecoins comparison:
$4 637 770 806
4 642 367 414 USDT
True USD (TUSD)
$142 642 507
142 774 586 TUSD
$117 378 890
116 657 463 DAI
USD Coin (USDC)
$437 135 555
436 509 786 USDC
$198 822 787
198 449 056 PAX
$2 066 629
2 163 170 BITUSD
$4 656 722
4 600 116 EOSDT
$4 003 607
3 968 720 GUSD
Binance GBP Stablecoin (BGBP)
$1 439 791
1 594 299 USDS
$19 820 011
4 205 530 273 RSR
Binance USD (BUSD)
$71 360 156
STASIS EURO (EURS)
$35 246 105 USD
Disclaimer: This article should not be considered as offering trading recommendations. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor should research multiple viewpoints and be familiar with all local regulations before committing to an investment.