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Stablecoins have garnered a lot of traction as a key component of the emerging Decentralized Finance (DeFi) ecosystem and as a potential method of payment for goods and services. They also enable trading on crypto exchanges, act as the underlying asset for many crypto loans, and let market players avoid the inefficiencies associated with converting crypto trades back to fiat money. They essentially act as a store of value for these transactions as well as a source of payment.
Seeing the potential of stablecoins, various organizations have taken a step forward and launched “Stablecoin-as-a-Service” or SCaaS, especially financial institutions. But wait. What was the actual reason to introduce SCaaS? Have you given a thought to this?
Find out the answer below.
Is there a downside to stablecoin?
Not all stablecoins are the same and may not be suitable for all purposes. There have been instances where stablecoins have lacked the trust that comes with compliance and transparency, posing risks to both users and organizations. It might be uncertain whether an underlying asset actually backs a stablecoin or whether it can be converted back to fiat money. Also, there is a high chance that a particular stablecoin has been associated with money laundering or other criminal activity. Lastly, we can say that various stablecoins are built on blockchains that are not optimized for financial applications, resulting in excessively high transaction fees.
That’s why to tackle these issues, Stablecoin-as-a-Service has been proven as a legit solution.
Introduction to Stablecoin-as-a-Service and Stably
Despite the promise to revolutionize finance technology, the crypto world frequently faces criticism for the price volatility of its most prominent assets. While volatility may be beneficial for speculative trading, it poses challenges for the practical use of cryptos as a real-world currency. Regardless of attempts to justify or explain this volatility, users, whether they are customers or businesses, are simply uncomfortable with the uncertainty surrounding the future value of their digital assets. To address this issue, stablecoins emerged as a solution. They are cryptos whose value is tied to various underlying assets such as fiat currencies or precious metals.
Talking about Stablecoin-as-a-Service – it represents an evolution of the traditional stablecoin concept by providing a solution that caters to the requirements of numerous companies and vendors. It allows businesses to access this service externally, eliminating the need for internal research and development efforts.
Stably, a FinTech start-up, has introduced the Stably USD (USDS) stablecoin, which will explore the emerging field of Stablecoin-as-a-Service.
Let’s have a quick overview of the newly launched stablecoin by Stably, Stably USD (#USD).
About Stably USD (#USD)
The introduction of Stably USD represents a significant achievement in the Bitcoin ecosystem. It is the first stablecoin based on the BRC-20 token standard to be issued natively on the Bitcoin blockchain, which is globally recognized as the pioneering and largest blockchain network. This groundbreaking milestone holds great importance as it paves the way for the expansion and acceptance of decentralized finance (DeFi) on the Bitcoin platform, often referred to as “BitFi.” Stably USD (#USD) has been specifically designed to offer the Bitcoin community a stablecoin that is both transparent and compliant with regulatory requirements. Its purpose is to facilitate a seamless transition for individuals and businesses from traditional finance (TradFi) to DeFi on the Bitcoin network (BitFi).
Stablecoins have emerged as a vital component of the growing DeFi ecosystem, enabling seamless trading, serving as a store of value, and avoiding inefficiencies associated with converting crypto to fiat. To address concerns of trust and compliance, organizations have embraced Stablecoin-as-a-Service (SCaaS). Stably’s introduction of Stably USD, the first BRC20 stablecoin on Bitcoin, marks a significant milestone, fostering the expansion of DeFi on the Bitcoin network. This transparent and regulatory-compliant stablecoin aims to facilitate the transition from traditional finance to BitFi, offering a promising solution for the future.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.