Volatility is one of the biggest obstacles points of worldwide cryptocurrency implementation. The cryptocurrency market, represented by Bitcoin, is considered to have only short-term investment functions due to the instability and volatility of the currency’s price value, and cannot fulfil the function as a stable asset for long-term investment. The long running bear market caused by the Bitcoin crash in 2018 is the most powerful evidence of this instability.

1. Stability

Facing the volatile state of cryptocurrency, the concept of stablecoin was proposed in 2014. The stablecoin anchors itself to the legalised fiat-currency issued by governments, thus, combining the stability of fiat-currency with the exceptional liquidity of cryptocurrency and it has become a hot demand in the market. Today, stablecoin has been widely recognized as the basic building block of the blockchain industry, only stablecoin can truly promote the application of cryptocurrency in the real world.

2. Real assets

Every good functioning cryptocurrency has a set project supporting it, and the stablecoin USDT claims that each issuance of the USDT has $1 in the bank, so the public and users do not have to worry that the USDT will suddenly unable to redeem their respective assets. This is a powerful guarantee in the everchanging cryptocurrency market. However, the solvency and financial ability of this stablecoin project requires a strict auditing process to endorse the assets it owns and eliminate the situation of over-issuing USDT，this is to ensure the public‘s trust and confidence in the project’s asset reserve.

3. Popularisation

The mainstream stablecoin that has been dominating the market so far is USDT/Tether coin; due to the popularity of the US dollar, USDT has won everyone’s favor and has become the most used cryptocurrency among major exchanges alongside with Bitcoin and Ethereum. It also increases helps with the public’s acceptance for cryptocurrencies.

For example, if someone offers a merchant to buy something with 5 Bitcoins, the merchant still has to check the value of the bitcoin; or maybe after a few days of contract signed, Bitcoin’s price appreciated or depreciated, this may cause lost or overpayment for both parties. In such condition, the stablecoin comes into the scene, both parties can just simply agreed on a set number of USDT. Stablecoin make it easier for more real-asset merchants to accept cryptocurrency as payment mechanisms, and gradually improve the cryptocurrency online and offline integration.

In short, the arrival of cryptocurrency is inevitable. All it needs is a gradual popularisation and acceptance by the public. Stablecoin is the catalyst that the world needed for integrating cryptocurrencies into the actual world. It also gives room for the development of Token economy and blockchain projects implementation. When these three aspects are recognized and accepted by the world, the fiat currency and cryptocurrency will be merged together; and in the future, new currency concept will be proposed, and then stablecoin will also quit the world stage after it fulfils its function.