Stablecoins race ahead: Fiat-backed crypto booming amid uncertainty

Despite this year's uncertainty that has plagued the global economy, 2020 will go down as the year of the stablecoins due to the digital sector's tremendous growth, with new developments emerging across the board.

Stablecoins are also useful for their ability to bridge the gap between fiat currencies and digital assets.

Stablecoins started off the year on a high note, as their cumulative transactional volume surpassed the $90 billion mark in a financial quarter for the first time ever.

Launched via a partnership between one of the biggest crypto exchanges and Paxos, Binance USD is a stablecoin pegged to the U.S. dollar.

Apart from TrueUSD, the TrustToken platform is also home to stablecoins backed by other national currencies including the British pound, the Australian dollar, the Canadian dollar and the Hong Kong dollar.

While speaking to Cointelegraph, Aymeric Salley, who heads the project, said: "Now is the time for stablecoins pegged to other national currencies such as the Singapore Dollar to emerge."

The reported increase in the overall supply of stablecoins has left many market watchers confused.

This growth in stablecoins comes at a time when various jurisdictions are also starting to warm up to the idea of creating their own stablecoins.

With increased volatility, more developers will keep an eye on the developments happening among stablecoins to create financial innovations that mitigate volatility.

The question now is whether stablecoins like Tether will overshadow the utility of Bitcoin, Ethereum and other cryptocurrencies as cross border payment protocols, as well as the fiat currencies they are pegged to.