Stablecoins: A Reliable Pillar in the Cryptocurrency Ecosystem

In the diverse landscape of cryptocurrencies, stablecoins stand out as one of the safest options available in the market. Essentially, stablecoins represent a digitized dollar that maintains a consistent value relative to traditional currency. Prominent examples, such as USDT, USDC, and USDB, all hold the same value as a single dollar. To provide some context, Tether was the pioneer of stablecoins, followed by Binance. Subsequently, Circle Internet Financial Group stepped in to capture a share of the stablecoin market with the launch of Circle USD and Circle Euro stablecoins. 

Stablecoins, as their name suggests, exhibit stability in their value, creating a dependable store of value in an otherwise volatile market. The current stablecoin landscape features USDC (backed and created by Circle Internet Financial Group), USDT (developed by Tether, founded by a trio of wealthy entrepreneurs—Reeve Collins, Craig Sellars, and Brock Pierce), and BUSD (backed by Binance). This raises an intriguing question: is the market for stablecoins competitive, monopolistic, oligopolistic, or monopolistically competitive? 

Upon analysis, it is evident that stablecoins operate within a competitive market structure. They face competition from various entities, including altcoins, meme coins, Bitcoin, and AI-driven cryptocurrencies. Moreover, stablecoins can also be characterized as a monopolistically competitive market due to the absence of a fixed price level, allowing for greater flexibility in pricing. Despite this flexibility, stablecoins continue to generate profits over the long term, reflected in the increasing market volume tied to the available supply. 

To assess whether a company in this sector holds a favorable position, investors should consider three crucial questions:

1) How is the company managed?

2) What is their track record?

3) Does the company foster a culture of innovation? 

In the realm of management, stablecoin companies typically fall within the low-risk category. The production of stablecoins is comparatively safer as it is closely tied to the United States Federal Reserve System. Supporting this notion, the World Economic Forum has acknowledged stablecoins as a valid form of currency in today’s economic framework, stating, “A stablecoin is a type of cryptocurrency that is pegged to a specific reserve asset. By being linked to an underlying asset, stablecoins can maintain a steadier value, making them a more reliable medium of exchange than other volatile cryptocurrencies” (World Economic Forum, 2025, para. 3: URL: https://www.weforum.org/stories/2025/03/stablecoins-cryptocurrency-on-rise-financial-systems/#:~:text=What%20are%20stablecoins?,to%20control%20supply%20and%20demand.) It is worth noting that money serves three key functions: (1) medium of exchange, (2) unit of account, and (3) store of value.  We will be looking at the first function of money in this example and how it relates to the cryptocurrency ecosystem by using stablecoins.

Reflecting on personal experiences, during a family missionary trip to Jamaica, we encountered significant economic differences that highlighted the importance of currency valuation. At that time, the conversion rate was 1 United States Dollar to 157.97 Jamaican Dollars. In pursuit of optimizing our financial resources, we exchanged our US Dollars for Jamaican currency at a local bank, which proved advantageous compared to using US Dollars directly. The differences in monetary system principles between Jamaica and the United States became increasingly apparent, especially as we observed the serious socioeconomic conditions faced by many locals. 

In a remote village, we participated in a Vacation Bible School program, opting to stay with a local family rather than in a hotel. This particular household, managed by a single mother with three wonderful children—Ethan, Kody, and Isabella (names modified for privacy)—provided a unique living experience in unfinished quarters without air conditioning, a reality especially pronounced in Jamaica's tropical climate. Our lodging in a basement area highlighted both the comfort and challenges inherent in such arrangements. 

Additionally, our exploration of the local marketplace revealed stark contrasts between local currency values and our usual expenditures. Spending nearly 2000 Jamaican Dollars on basic items emphasized the practical significance of local currency. This experience offered invaluable insight into Jamaica's socio-economic framework, which starkly differs from that of the United States. 

Ultimately, this journey exemplifies how varying currencies function, mirroring the utility of stablecoins. Stablecoins serve as a secure method for storing physical dollars, enabling traders to operate freely within the cryptocurrency realm.

Thank you for joining us for this discussion on the value of stablecoins. In our next article, we will explore how stablecoins impact the lives of Christians in persecuted nations like China and other developing countries. Later, we will delve into alternative cryptocurrency mediums of exchange.