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Money and the economy have a very important structure for people, and with technological advancement, the stablecoins vs fiat currencies comparison is highly questioned.
Join us in this blog as we examine the details of stablecoins and fiat currencies for you in the rest of our article. In this way, all your questions about the subject will be answered, and you can decide which one is more beneficial for you and your business.
The management of material resources and economic management shape people’s lives. For this reason, cryptocurrencies, especially stablecoins, have been one of the leading investment instruments that have emerged in recent years.
They continue to change the economy, which is mainly built on fiat currencies. It is accepted that they are more useful than traditional currencies.
However, many users don’t want to risk cryptocurrency investments due to price fluctuations. Due to this situation, digital coins called stablecoins, which are stable and have the same value as real coins such as the euro, are preferred.
It would not be wrong to say that fiat currency investments are still as effective as stablecoins. People turn to some types of investments in order to prevent their money from losing value.
Fiat currencies are a style of asset management and investment with a structure that provides support. They typically consist of government-approved investment instruments in silver, gold, the dollar, the euro, and other fiat money.
However, the fact that there are some physical procedures is one of the disadvantages. Stablecoins and fiat currencies are very similar to each other. But while stablecoin is a digital investment instrument, the other represents more tangible investment instruments. Let’s take a closer look!
Stablecoins are types of cryptocurrency with a stable structure. It has a stable value against various tangible financial assets. It is possible to see that it is a digital representative and equal to real estate, gold, silver, the dollar, the euro, and all other currencies that come to mind.
Especially in euro-based stablecoin types, interest is quite high. Therefore, euro stablecoins such as EURK are in high demand. Stablecoins will be preferred due to the risk-free nature and transparency offered by blockchain technology.
In addition, it is difficult to experience losses due to the lack of sudden changes in standard cryptocurrencies. For this reason, it is one of the first choices for people who do not like risk.
Fiat currencies are widely used in traditional finance. Governments and states are known to support these types of funds. Since they have a physically printed structure, they consist of formations such as silver, gold, the dollar, the euro, and other types of currencies.
They are preferred because of their legally accepted structure and state sponsorship. However, due to its physical presence, many people generally use it as cash. For this reason, it has a challenging structure for investment purposes.
People have started to focus on stablecoin investments instead of fiat currencies due to the digital age and blockchain technology. Especially the preference for EURK, the euro stablecoin, which is 1:1 pegged to the euro, is more common.
You can easily check out our articles to learn more about "investing in stablecoin", "types of stablecoin", "how to buy/sell EURK" and "how to transfer EURK"! We have a wide range of blogs to inform you about the advantages and use of blockchain payment solutions.
One would wonder what the most fundamental difference is between stablecoins vs fiat currencies. Although they may seem similar, there are some important differences. The most important of these differences is that one is physical and tangible.
Stablecoins are digital stablecoins. Fiat currencies, on the other hand, are investment instruments backed by governments, where the government or state undertakes the minting process. Although stablecoins are legal, they have a more free and independent structure.
There is also a difference between the two types of investments in terms of reserves. We can say that stablecoins are tied to any type of reserve asset. However, fiat currencies are not tied to any reserve. Therefore, they are more likely to lose value.
For example, a person who decides to buy EURK stablecoin makes an investment with reserves both in Switzerland and the Dominican Republic. However, the same is not the case with fiat currencies. Therefore, stablecoins and fiat currencies are different, although they seem similar.
As mentioned above, fiat currencies are the types of money that the states support. It is a type of currency that states and governments issue and release to the market with central authority. Since it is not linked to reserves, it has a structure with a risk of money loss.
Stablecoins, on the other hand, have a much more stable and transparent structure. Due to blockchain technology, they are decentralized and provide more freedom to their users.
For this reason, it is questioned whether stablecoins can replace fiat currencies. According to the data revealed in 2023, it is clear that people are turning towards digital investment tools more and more every day.
Stablecoins are one of the first choices due to their ease of investment and extra advantages for fast and secure transactions.
For this reason, stablecoins have already started to replace fiat currencies. In the coming years, complete hegemony and dominance will emerge. They seem to be promising a future of money.
It would not be wrong to say that stablecoins are suitable for companies as well as individual investors. Therefore, the benefits it offers for companies will be wondered about in large numbers.
Speed is of great importance in cryptocurrency investments and stablecoins. Companies may have instant expenses and shopping needs for e-commerce payments and cross-border payments.
In such cases, it is desirable to pay with stablecoins. Fast and easy transactions are one of the important benefits of crypto payments.
Expenses and costs are of great importance for businesses. For this reason, it is the dream of every business to make transactions with lower fees. Thanks to stablecoins, transaction costs are kept to a minimum, and savings are possible.
As with cryptocurrencies, you can trade stablecoins at any time you want. If there is a transaction request late at night, it is possible to give the order you want instantly.
Especially due to its structure connected to technologies such as blockchain, the process is completed much more efficiently and successfully.
All stablecoin transactions made with blockchain technology are recorded. Blockchain is like a notebook with a digital structure. Therefore, all transactions are transparently visible and recorded. Transparency in stablecoins is an important benefit.
Thanks to the different types of stablecoins, purchases can be made against any asset you want. It provides a great advantage in global payments, especially since it corresponds to real currencies such as the euro, dollar, and pound.
In global inter-company trading systems, stablecoins play a savior role. Transactions become practical with currency units widely used around the world.
If you want to benefit from stablecoin advantages, choose EURK euro stablecoin. One-stop shop crypto service provider Cryptobunq offers EURK, a dependable euro stablecoin. You can easily buy and sell EURK for all your transaction needs. You can also benefit from a wide range of other crypto services from CBQ.
Stablecoins have a stable structure. It is seen as risk-free by many users due to its transparency. It should not be forgotten that there is a risk of loss due to the sudden and changeable behavior of cryptocurrencies.
For this reason, stablecoins with a value indexed to real assets are frequently preferred. We see that stablecoins are categorized according to which asset they are indexed to.
While the algorithmic stablecoin type has an index parallel to the algorithm, the commodity-backed type is indexed to precious metals. Generally, there is the use of other types of real estate than metals such as gold and silver.
Crypto-backed stablecoins have values corresponding to cryptocurrencies. The most commonly used stablecoin type is fiat-backed stablecoins. They have a value structure corresponding to the dollar, euro, and various other currencies.
It would not be wrong to summarize it as an exchange, as it usually has a value of 1 to 1. For example, a person who buys 1 EURK has the instant value of 1 euro. Therefore, with the exchange EURK process, the cash euro will be converted into the digital euro type.
If you have been wondering about "stablecoins vs fiat currencies" and their differences, we tried to answer all the questions you might have. With blockchain technology, stablecoins provide more benefits than fiat currencies.
The digital age changes the way money works, and if you want to benefit from stablecoin’s advantages, contact us. Choose EURK for fast, easy, and secure transactions, and take your business to the next level!
