The quest of STABLECOINS — seeking stability in the volatility of the crypto market

To analyze stablecoins from a mean of payment perspective, we should consider two main factors: transfer speed/costs and control/privacy issues.3.1. Transfer speed and costsHigh transfer speed is important for real-time payment applications and may strongly limit a coin’s proliferation. Most popular stablecoin — Tether mostly uses Bitcoin (Omni) blockchain and, probably, is the slowest and the most expensive to transfer stablecoin.At the same time, it is still much more attractive than traditional banking transfers. Other stablecoin projects use either Ethereum blockchain (Dai, True USD) or develop their own blockchains, which claim to be even faster and cheaper.Need to mention that new generation blockchains can potentially enable almost instant transfers with little or ‘close to zero’ fees for the users, and they could be a quite attractive proposition for stablecoin users.3.2 Control/Privacy issuesCryptocurrencies have been invented with a spirit of freedom, meaning that only private key holders may decide how and where to use their money.Meanwhile, many stablecoin projects set some constraints on users (strict KYC procedures) and operations or have a potential to do so in the future.This especially relates to all projects which use fiat as collateral. Given that governments have full access to such collateral and regulations, in general, become more strict, we may assume that most stablecoins which are fiat-based will be regulated as tough as regular banking accounts in the future.This means that holders of such coins may face problems similar to what they experience now in banks: tough and long KYC, potential limits on transfers, requirements to explain some operations, and all other things which inspired the creation of cryptocurrencies.We also know that all regulatory burden is always transferred to the client, which means that fiat-based coins can be more difficult and expensive to use in general.Stablecoins that don’t have fiat collateral (especially in USD)…