6 Safest Stablecoins in September 2022—Top Investors' Choice
Published September 23, 2022.
Stablecoins provide crypto investors with an opportunity to ride the crypto waves amid high volatility—while still maintaining the value of their portfolios.
As their name suggests, stablecoins are designed to remain stable in price, usually pegged to a fiat currency or other less volatile assets. This makes them ideal for use in commerce and trading, as well as for holding as a long-term investment.
With so many stablecoins on the market, it can be hard to know which ones are the safest to invest in. We take a look at six of the best stablecoins to invest in based on stability, market capitalization, and liquidity.
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1. Tether (USDT)
Tether (USDT) is one of the oldest and most popular stablecoins in the market. USDT has been in the crypto market since 2014 and is pegged to the US dollar at a 1:1 ratio. It has a market cap of $67.92B, making it the largest stablecoin as well by far.
Tether adheres to world-class compliance measures for anti-money laundering (AML), know your customer (KYC), and countering the financing of terrorism (CFT) rules regulations—making it one of the most trusted stablecoins in the market.
2. USD Coin (USDC)
Every online digital dollar of USDC is 100% backed by real cash and short-dated U.S. treasuries, ensuring that it's always redeemable in equal amounts of US dollars. Its market cap is $50.19B.
USDC is also one of the few stablecoins that undergo regular audits to ensure that it's backed 1:1 by US dollar reserves. These audits are conducted by the top five independent firms, including the likes of Grant Thornton LLP. The statements and reports are published monthly on the center's website for full transparency.
3. Binance (BUSD)
Binance (BUSD) is a stablecoin issued by one of the world’s largest cryptocurrency exchanges, Binance, in partnership with Paxos. BUSD is a dollar-backed stablecoin that always holds its value at 1:1 with the US dollar. This means that BUSD can always be bought and sold at the same rate of 1 BUSD to 1 USD.
BUSD is ERC-20 compliant and hence compatible with Ethereum-based wallets and applications. It's also regulated by the New York State Department of Financial Services, providing investors with an additional layer of protection. BUSD has a market cap of $20.52B.
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4. Dai (DAI)
DAI is a cryptocurrency that was created by MakerDAO and is intended to be a stablecoin free of any centralizing authority, as opposed to other stablecoins, which are vulnerable to censorship. DAI is pegged to the US dollar and uses collateralized debt in the form of Ether (ETH).
What makes this stablecoin different from others is that it doesn't require collateral held by a company. The process is regulated through smart contracts associated with Collateral Debt Positions taken out with MakerDAO. The stablecoin has a market cap of $6.88B.
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5. TrueUSD (TUSD)
TrueUSD (TUSD) is a dollar-backed stablecoin that was created to provide its users with a more trustworthy and transparent alternative to other stablecoins in the market. All TUSD in circulation is backed 1:1 by US dollars held in escrow accounts with verified US banks, making it one of the most stable and reliable stablecoins.
TrueUSD claims to be the first regulated stablecoin in the market. It's fully collateralized, legally protected, and transparently audited at regular intervals. These audits are conducted by top-tier accounting firms such as Cohen & Company. TUSD has a market cap of $1.08B.
6. Pax Dollar (USDP)
Pax Dollar (USDP) is a dollar-backed stablecoin created by Paxos, a New York State chartered trust company. USDP is always backed 1:1 with US dollars held in reserve by Paxos, making it a reliable and trustworthy stablecoin.
Paxos is a regulated financial institution, providing an additional layer of protection to investors. Paxos also conducts regular audits of its US dollar reserve, which are then published on its website. The current market cap is $ 945.39M.
There are many different types of stablecoins in the market, each with its own unique features and benefits. However, all stablecoins share one common goal: to provide a more stable and reliable alternative to other cryptocurrencies. When looking to invest in and to make money with stablecoins, it's always helpful to research each option thoroughly to find the one that best suits your needs.