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Which Is The SAFEST Stablecoin in Crypto?
Stablecoins play an important role in the crypto economy. They are cryptocurrencies designed to maintain a steady value pegged to an underlying asset that's more stable, like a national currency. Specifically, many of the most popular stablecoins on the market are pegged to the U.S. dollar. Their existence also allows more digital asset trading on crypto exchanges, bringing more liquidity into the crypto market. Unfortunately, stablecoins don't always act as they should: On May 9, the third-largest stablecoin, TerraUSD (UST) began to violently "de-peg" from the U.S. dollar, trading for as low as 30 cents on the dollar in subsequent days as large blocks of UST were sold, sparking fear. In light of that volatility, here are five of the best stablecoins to consider.
Stablecoins are cryptos that are tied to a reserve asset such as a currency (like the dollar or euro) or a commodity (like gold, oil or real estate). Backing by other assets makes the value of stablecoins less prone to roller-coaster changes in price, hence the name.
Investors use stablecoins to protect their money from sudden price swings associated with other cryptocurrencies. In effect, stablecoins are meant to serve as the tokenized version of fiat currency or other assets with a fixed value.

Decentralized finance platforms like BlockFi and Celsius use stablecoins to lend crypto to their customers. The reason they use stablecoins is that the value of the collateral- or currency-backed tokens is unlikely to change dramatically between the time a customer gets approved for a loan and the cryptocurrency lands in the individual's digital wallet.

More advanced crypto investors may use stablecoins to avoid paying transaction fees on crypto exchanges like Binance and Coinbase, many of which don't charge fees for currency exchanges for stablecoins.


Crypto creators have marketed stablecoins as safe and predictable, but as investors discovered this month that is not always the case.


Although it's pegged to the U.S. dollar, for example, the stablecoin terraUSD fell to $0.77 this week. Luna, another dollar-backed stablecoin, fell below $1 on Wednesday night; tether fell Thursday to $0.95.

Some investors were so outraged by the devaluation of their stablecoins that they filed a lawsuit Thursday against Coinbase. The lawsuit is centered on the stablecoin GYEN, which is pegged to the Japanese yen.

"Investors placed orders believing the coin's value was, as advertised, equal to the yen, but the tokens they were purchasing were worth up to seven times more than the yen," the lawsuit states. "Just as suddenly, the GYEN's value plunged back to the peg — falling 80 percent in one day."

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