"Fiat-backed stablecoins are therefore rarely actual cryptocurrencies, which causes them to inherit their main characteristics and shortcomings from the centralised banking system. Ultimately, they function in the same manner as fiat, backed by what amounts to an IOU."
Danial Daychopan wrote a short article linked below that has got me thinking. Are stablecoins bad for the cryptocurrency ecosystem because they are essentially fiat in digital form, or are they beneficial as they provide stability in an extremely volatile market? Curious to hear your thoughts, give it a read and let me know your angle on it.
https://medium.com/@DDhopn/stablecoins-3b93b4f1ddc5If we see it from this perspective then I guess stable coins are necessary to be present in the crypto market. Just think about it in this way, when the market is too volatile and the prices are going down, you will need a stable coin to save your investment because if the coin is not stable then your portfolio will have significant decrease anyway. So in order to keep the investment safe we do need stable coins like tether which are backed by fiat currencies.