Each day, the market capitalization of stablecoins – cryptoassets backed by a national currency – grows US$ 100 million. And this has been happening since mid-July, says in tweet Nic Carter, co-founder of CoinMetrics. Shortly after, he confirmed to a follower that “DeFi yields and interest rates clearly acts like a vacuum sucking many stablecoins”.
This growth of the stablecoins happens because the DeFi market has also been experiencing a boom. According to Cointelegraph, the price of DeFi assets rose 168.4% in August. The publication recalls that stablecoins are usually used to form the liquidity pools of DeFi protocols. In addition, it is possible to borrow stablecoins on DeFi platforms.
Governments debate stablecoins market
The stablecoins debate has already reached governments. In Brazil, the Central Bank is expected to make a final decision within six months on a possible digital version of the real. Meanwhile, the subject has been debated for some months now by the U.S. Senate Banking Committee. And one of the senators pointed out the advantages of adopting the digital currency. China, for its part, has tested digital yuan.
The president of the Bank of England, Andrew Bailey, in turn, believes that the stablecoins can present benefits for investors. But, according to Cointelegraph, he imposed a requirement that they should be a means of payment. “They should have standards equivalent to those valid today for other forms of payments and other forms of money transferred through them”, Bailey said.
The evaluation, however, was more positive than that regarding other cryptocurrencies. For him, cryptoassets are “inadequate for the world of payments”.
Because they are backed by a national currency, the stablecoins are stable – as suggested by the name. Thus, having stablecoins in the wallet, the investor can wait for the best moment and have more agility to buy a more speculative asset, such as the bitcoin.