An Overview of Stablecoins
18 January 2018
Stablecoins have been one of my major areas of interest since I got involved in crypto. I first learned of Bitcoin when I was studying abroad in Argentina in 2014. At the time, Argentina was in the midst of a currency crisis that had resulted in widespread inflation, and Argentinian citizens were still reeling from a 2001 market crash that ended with the government freezing bank accounts for a year.
To combat hyperinflation, Argentinian citizens developed a thriving black market for US dollars. Citizens purchased US dollars legally, but their purchases were capped. People regularly exchanged pesos for dollars from black market vendors, literally stashing their savings in mattresses. When the government currency stopped serving their needs, people widely turned to other currencies. Amidst this crisis, certain features of Bitcoin had serious appeal. It was a currency that wasn’t controlled by any government, could easily be sent or transported internationally without interference, was easier to safeguard than physical dollars, and couldn’t be seized. The only problem was that Bitcoin wasn’t a safe hedge against fiat inflation because Bitcoin itself was too volatile.