Post
Topic
Board Altcoin Discussion
Re: Could stable coins save a deprecating economy
by
Dr.Bitcoin_Strange
on 18/08/2023, 11:57:13 UTC
Stability: Stablecoins are designed to be less volatile than traditional cryptocurrencies like Bitcoin or Ethereum. This stability could provide a more reliable medium of exchange and store of value, especially in economies with rapidly depreciating currencies.

stability and depreciation? A coin can be stable, but its value can still depreciate in some circumstances. If the stable coins are backed by a physical asset whose value is also bound to depreciate with an increase in the inflation rate, will it still save the economy? Most of those stable coins are backed by some fiat, like the USD, which means if the value of the USD depreciates, they will also be affected. Even volatile assets like Bitcoin are very important in the economy; they're a hedge against inflation as their value can greatly improve over a short or long period of time, but if inflation strikes, fiat drop in purchase power due to value depreciation.