Why 2020 is the year of Stablecoin?

Stablecoin is a digital currency designed to maintain price parities on ‘stable’ assets. They can have
their value pegged into fiat money, other digital currencies, gold, and even be used to exchange
trade commodities. In recent days, Stablecoin has had a booming growth of nearly $3 billion.
Evidence of its use in the financial world and as collateral for decentralized networks emerged as
2020 began. Furthermore, it has proven to be a bridge for value transfer between exchanges.

All these changes suggest Stablecoin will rein the world of cryptocurrency in 2020, and maybe even
beyond. Here are a few factors that will make Stablecoin will be cryptos biggest use case of 2020:

Big Organizations coming into play

J.P Morgan- America's largest bank became the first US bank to establish a digital coin testing
system, that represents fiat currency. The bank claims that it will now use blockchain technology for
payment transferrers. Other corporations such as Facebook have come up with proposals to launch
digital currency which will control finical systems. This has been named ‘Libra’. The fact the
Facebook is getting involved in such capacity again highlights the importance of Stablecoin. Many
other organizations are expected to follow their footsteps.

These organizations and their clients alike find the need for digital mobile money, which is easily
accessible, instant, low cost, and most importantly secure. Stablecoin provides all this and is even
pegged to be more reliable and liquid.

DeFi at rise

In the year 2019, DeFi growth surged constantly. Financial services believe that decentralized
technology will play an important role in their future and Stablecoin will be playing a significant part
in their shift towards decentralization.

It is because Stablecoin provides decentralized products, that can solve problematic processes and
high transactional fees which have always been an issue in the adoption of digital assets. With DeFi’s
growth to be persistent, Stablecoin benefits can not be overlooked in 2020.

Blockchain for Central Banks

After the interest depicted by many corporations in establishing digital financial systems, many
central banks have decided to explore the option of Central Bank Digital Currency (CBDC). The
European Central Bank has gone as far as setting up a special task force for this purpose. Another
bank, The People’s Bank of China has been involved in developing Digital Yuan for many years. In
August 2019, United States Federal Reserve Board announced its intentions to launch a real-time
payment service, called FedNow.

All these measures suggest that corporations around the world are interested in Digital currency,
and particularly Stablecoin, whose nature is just right for all their requirements. Stablecoin gives
them the infrastructure to transform their finical systems into digital ones with cheap and fast
services.