A relatively new introduction to the cryptocurrency space, stablecoins are crypto coins backed by an asset. Many stablecoins are backed by a fiat currency like the USD. Others are backed by precious metals. Tether (USDT) is the most popular stablecoin. It’s second to bitcoin in daily trading volume and ranks eighth in terms of market cap.
Because tether refuses to agree to an audit, some crypto investors have worried it’s not really backed by the USD as it claims. This has led to the rise of new stablecoins challenging tether’s spot as the top stablecoin. Three of these coins are Tiberius (TCX), Paxos Standard (PAX), and Gemini Dollar (GUSD).
If you don’t like the thought of a crypto coin backed by fiat currency, then you may like Tiberius. It’s backed by seven precious metals, making it a unique choice for crypto investors to include a digital coin with a little more security in their portfolios. Although the coin was released on October 1, it’s expected to be popular among crypto investors. The Swiss government regulates the selling of Tiberius to ensure each coin is backed by precious metals.
2. Paxos Standard
Regulated by the New York State Department of Financial Services, investors have confidence that Paxos Standard is truly backed by the USD as it states. The crypto coin is collaterized at a 1:1 ratio. PAX’s corresponding USD is safely stored in FDIC-insured bank accounts. When someone exchanges PAX for USD, the PAX coins are destroyed.
3. Gemini Dollar
Gemini Dollar is regulated by the New York State Department of Financial Services, ensuring that the crypto coins are actually backed by USD. For transparency, Gemini Dollar keeps its reports available for the public to read. This helps some crypto investors feel more trusting in the coin. Every month Gemini Dollar checks the corresponding bank account balance to confirm it’s accurate. The USD is stored at the State Street Bank and Trust Company.
Albeit controversial because some crypto investors think cryptocurrency should remain purely digital and unregulated, stablecoins are securing a foothold in the crypto market. The upside of some of these coins are they are regulated to ensure you actually have a fiat currency of physical commodity associated with each coin, so that you’re not scammed. However, keep in mind not all stablecoins are regulated.