Stablecoins are a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, such as a fiat currency, commodity, or other financial instrument.
Unlike traditional cryptocurrencies, which can experience significant price fluctuations, stablecoins offer consistency in value, making them relatively more reliable for transactions, and savings, and as a bridge between traditional finance and blockchain technology.
Types of stablecoins:
- Fiat-based: Pegged to a fiat currency like the US dollar, euro, or pound, and backed by reserves held by an issuer.
- Commodity-based: Pegged to tangible assets like gold, silver, or oil, providing intrinsic value.
- Algorithmic: Use smart contracts and algorithms to maintain price stability without relying on physical reserves.
Benefits of stablecoins:
- Stability: Designed to minimise price volatility, ensuring predictable value.
- Efficiency: Enable fast, low-cost transactions across borders without relying on traditional banking systems.
- Accessibility: Provide an easy gateway for users to interact with blockchain ecosystems while retaining familiar value benchmarks.
Stablecoins serve as a critical link between traditional and digital finance, offering the reliability of stable value combined with the flexibility of blockchain technology.
What is Kinesis’ native stablecoin: USD1
USD1 is Kinesis’ native stablecoin, pegged 1:1 to the US dollar, designed to provide a trusted medium of exchange within the Kinesis ecosystem.
USD1 enables users to seamlessly move between digital currencies and Real-World Assets while benefiting from fast, low-cost, and highly liquid transactions.
Built for global efficiency, USD1 operates on the Stellar blockchain network, allowing for near-instant transfers and significantly reduced transaction fees. Additionally, USD1 is available on the ERC-20 blockchain enabling universal integrations.
As the base currency on the Kinesis Pro exchange, USD1 supports most trading pairs, including Kinesis’ native Real-World Assets backed by gold and silver, KAU and KAG.
The USD1 stablecoin is pegged to the dollar and backed up by overcollaterised fiat reserves, with independent attestations publicly available. This ensures a high level of trust and reliability, ranking USD1 among the most secure stablecoins available.
Learn more about USD1, on the token’s dedicated page here. For additional details, including monthly attestations, click here.