Well! Stable coins are not that stable how it sounds
We all know how a stable coin is owned! An individual has to buy (bid on) 1 U.S. $ to gain one stable coin. Here, if we take the case of Tether; a most immensely used (stable coin) in practice, many pinching realities will surface.
If one critically analyse the main reason behind the coining of the term ‘stable coins’, one will find out that stable coins came in origin solely to diminish centralization from the world of cryptocurrencies.
But present seems to be a different picture for the fate of stable coins, as critics are somehow putting them behind the bars of acquisition!
Yeah! Its harsh but it’s true.
There was a time when Bitcoin; a foremost introduced crypto asset came into origin to rid the people of America from inflation of currency. And today is such time when the periphery in which these stable coin functions is tangling with some real impacts!
Do you want to know how? A stable coin (s) is issued to an individual as a token in return of a fiat currency (1 U.S. $). But, in this case, every individual, owner or bidder doesn’t get an equal and just chance to churn out these stable coins productively. Here lies the inevitable drawback!
What about the aim of decentralizing almost everything which concerns the crypto market? Do we consider all this in vain?
Here lies the humour! Stable coins came into mainframe to rush inflation to the ground. And what’s really happening is the exact opposite of it!
What do you say?
Everyone knows one fiat currency makes one stable coin happens. An individual think that the fiat currency goes mute once its work is done. It’s not so! Once a fiat is detached, it is stored in banks. Meanwhile the sudden hype in the market value of fiat rises by thus, automatically increasing the inflation of stable coins.
You think is stable coins will become the root cause of inflation, then, how can one tell about the fate of other cryptocurrencies in general!
Yeah! Cryptocurrency (stable coin) investor is clearly liable to pay income tax on the profits he/she earns by investing (trading) in these assets as part of their total earning income.
But at a point the practice disappears! You know why? The gains earned at the time of bear market rush doesn’t fall in the category of levying income taxes by almost every major governments of the world.
Well! This imbalances everything. Governments goes empty-handed as today the world economics is dependent on the crypto success.
What will be left then? If cryptocurrencies (specifically stable coins) flash out these tantrums, then, how can they expect world governments to legalise them or even to consider them!
From above a reader can gain a synopsis that stable coins are no different than crypto coins (in general). What do you say?