Recently, a report by Digital Euro Association has been released regarding the potential of stablecoins in the future, showing that they could be used as a medium of M2M or Machine to Machine transactions. We are all aware of the fact that stablecoins are linked with some assets which makes them authentic and less prone to risk than other types of cryptocurrencies.
For those who are not aware, Stablecoins are becoming popular because of their reliability and stability. Stablecoins are being considered as a potential replacement for the euro CBDC, according to recent reports.
Stablecoins are a type of cryptocurrency that is linked to physical assets that exist in the real world, such as gold or fiat currency. If we compare stablecoins with Bitcoin, we can see that stablecoins are more reliable and secure than Bitcoin because of their predictable nature. With Bitcoin, we cannot predict what will happen in the next second; one can make huge profits or lose everything in just a few minutes.
There are various types of stablecoins pegged to different assets, such as fiat-linked stablecoins, commodity-linked stablecoins, and algorithm-based stablecoins.
Stablecoins can be used for hassle-free and seamless payments between machines to machine transactions.
Some experts believe that stablecoins are secure and easier to process than any other cryptocurrencies. Various benefits are pegged with these coins like you can use them as payment for digital assets, and international trade. Additionally, they are faster and take less time to process.
As the Internet of Things (IoT) becomes more popular in the fast-growing world, Stablecoins could play a significant role in this transition. These technologies are still in their nascent stage,
therefore more research is needed to understand their pros and cons.
Stablecoins may help with the transition to a fully digital economy that is more reliable and open as we see new Internet of Things devices emerge every day. Before making it as a replacement of CBDC one needs to understand this process and related terms.