A stablecoin or stablecoin is a cryptocurrency whose value is linked to that of another currency, an asset, etc. Among them, those that have a value equivalent to the US dollar stand out, such as Tether (USDT), USD Coin (USDC) or DAI (DAI). To better understand what the characteristics of each one of them are, Cointelegraph en Español consulted Julián García, Data science at Quantia Capital, in Argentina, who explained some points and differences between them.
Tether (USDT)
“Tether (USDT) is a stablecoin issued by a Hong Kong-based company called Tether Limited, which supports its issuance through cash, bank deposits, treasury bills, secured loans, commercial papers, certificates of deposit, notes of reverse repurchase, corporate bonds, funds and precious metals, among others “, detailed García.
“The main advantage of Tether is that it is the most liquid currency in the market. Therefore, large volume operations can be carried out without significantly affecting the price,” he added later.
However, as a main disadvantage, he explained that Tether Limited is a private company that does not have a regulatory framework or an audit.
USD Coin (USDC)
“USD Coin (USDC) is a stablecoin issued by the companies Circle and Coinbase, registered with the endorsement of the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury. In addition, they have a New York Bit License, and an endorsement by the Financial Conduct Authority of the United Kingdom “, specified García.
“All units in circulation of this cryptocurrency are backed by a dollar that is kept in reserve, in a combination of cash and short-term US Treasuries, with periodic audits. For this reason, the main advantages of USDC are the certainty regarding the reserves that support their issuance and compliance with the regulations of the different organizations, “he added.
DAI (DAI)
“DAI (DAI) is a stablecoin whose issuance and development is managed by the Maker protocol and the Maker DAO decentralized autonomous organization over the Ethereum network. This means that to issue DAI no institution is required. Anyone can issue it. by leaving other cryptocurrencies blocked in the protocol’s smart contract vaults. Their support underlies the value of the cryptocurrencies that are blocked when issuing, “he said.
According to García, the main advantage of DAI is that it is not a cryptocurrency issued by an institution. This is because the management of reserves is managed in a decentralized way.
conclusion
To conclude, the data science of Quantia Capital also highlighted that stablecoins have their own advantages and that the choice of one over another depends on the need or priority of each user. The decision is up to each one.
“For example, the liquidity in the case of USDT, the certainty in the support of the issue and the regulatory framework in the case of USDC or the decentralization of the issue in the case of DAI,” he concluded.
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