Cryptocurrency users who prefer a secure and consistent way to make payments have increasingly turned to stablecoins. As of May 2024, the stablecoin market has seen significant growth, with over 27.5 million active users, according to a report by Visa. Merchants and companies are noticing this trend and rapidly adopting methods of accepting stablecoin payments from their clients.
In this article, we will discuss the top 5 best stablecoins for crypto payments in 2024, exploring their benefits and reliability.
Best Stablecoins for Crypto Payments
Here is the list of stablecoins that are transforming the future of crypto payments:
Tether (USDT)
Tether is the undisputed pioneer in terms of stablecoin market cap figures. Launched in 2014, it was one of the first virtual assets built to maintain a 1:1 peg with the US dollar, providing a strong and stable currency within the crypto ecosystem.
The widespread adoption of USDT, as well as its liquidity, set it apart from other options. As the third biggest cryptocurrency overall, Tether is widely accepted across numerous exchanges, wallets and DeFi platforms, which makes it a popular choice among traders, investors and businesses looking to facilitate seamless transactions and mitigate volatility.
Is USDT Safe?
USDT has faced its fair share of controversies, primarily surrounding the organisation's reserve holdings and the company's partnership with the Bitfinex exchange. Still, USDT has managed to maintain the status of being the leading stable token, largely due to its first-mover advantage and the trust it has built among crypto enthusiasts over the years.
Market Cap: $112 billion
USD Coin (USDC)
USD Coin is the second biggest stablecoin by capitalisation, offering a compelling alternative to Tether. Launched in 2018 by a group of companies, including Coinbase and Circle, USDC is a fully collateralised stablecoin backed by US dollar deposits at regulated institutions.
Is USDC Safe?
USDC's commitment to transparency and regulation compliance are its key strengths. The project regularly publishes attestations from independent auditors, ensuring that the USDC in circulation is fully backed by the corresponding US dollar reserves, thereby offering the safest stablecoin on the market.
USDC has also been gaining traction in the DeFi space, where it is widely used as a stable store of value, a collateral asset for lending and borrowing, and a means of exchange for various protocols. The seamless integration of USDC with the Ethereum blockchain has further contributed to its widespread adoption.
Market Cap: $32 billion
Dai (DAI)
DAI is a unique stablecoin that stands out from the traditional fiat-backed models. Developed by the decentralised autonomous organisation MakerDAO, DAI is a crypto-collateralised stablecoin, meaning it is backed by a pool of Ethereum-based cryptocurrencies rather than fiat reserves.
The decentralised nature of DAI is its primary selling point, as it eliminates the need for a centralised issuer or custodian. Instead, the stability of DAI is maintained through a complex system of smart contracts, algorithms and incentives that dynamically adjust the token supply to keep the price pegged to the US dollar.
DAI has gained significant traction in the DeFi ecosystem, where it is widely used as a stable medium of exchange, a collateral asset for lending and borrowing, and a tool for market volatility mitigation. The decentralised structure of MakerDAO also allows for a high degree of openness and public involvement in the management of the DAI stablecoin.
Market Cap: $5,3 billion
TrueUSD (TUSD)
TrueUSD is a stablecoin that sets itself apart with its unique collateralisation model and focuses on transparency. Unlike other fiat-backed stablecoins that may hold reserves in private accounts, TUSD's US dollar reserves are held in escrow accounts managed by third-party trust companies.
This approach aims to provide an additional layer of security and accountability, as the issuing company, TrustToken, does not directly control the TUSD reserves. Additionally, TrustToken publishes regular attestations from independent auditors, ensuring that the corresponding US dollar reserves fully back the TUSD in circulation.
TUSD's Ethereum-based ERC-20 standard and its seamless integration with various DeFi protocols have also contributed to its growing popularity. Traders and investors seeking a stable and secure option have increasingly turned to TUSD as a reliable alternative for their crypto-based transactions and investments.
Market Cap: $494 million
Binance USD (BUSD)
Binance USD is a stablecoin developed through a partnership between the leading crypto exchange Binance and the regulated financial institution Paxos. Launched in 2019, this asset is a US dollar-denominated currency backed by dollar reserves.
The close association with Binance, one of the most influential players in the crypto industry, has been a significant driver of BUSD's growth and adoption. BUSD is accepted on the Binance platform and other major exchanges, offering convenience for traders and investors who operate within the Binance ecosystem.
In addition to its strong backing and integration with Binance, BUSD is also regulated by NYDFS, providing an additional layer of trust and security for users. Paxos's monthly audits further enhance the transparency and reliability of the BUSD stablecoin.
Market Cap: $70 million
Final Thought: Stablecoins as a Future of Payments
Although stablecoins are still in their early stages of adoption, the path to widespread acceptance is well underway. Currently, stablecoins primarily serve as reliable stores of value rather than mediums of exchange, thanks to their superior stability and credibility compared to other cryptocurrencies.However, as the technological landscape evolves and overcomes existing limitations, we can expect a shift towards more transactional uses of the most stable cryptocurrency options. The potential for using these digital assets for everyday purchases, such as digital content and media, is imminent. The minimal transaction fees chargeable by stablecoins offer significant potential for micro-payments, which could drive greater adoption and spur further innovation in this dynamic space.
