What are stablecoins, the asset rocking the cryptocurrency market?

LONDON: Most cryptocurrencies have a major problem with price volatility, but one sub-category of coins is designed to maintain a constant value - stablecoins.

They attempt to maintain a constant exchange rate with fiat currencies, for example through a 1:1 US dollar peg.Stablecoins have a market cap of around US$170 billion, making them a relatively small part of the overall cryptocurrency market, which is currently worth around US$1.2 trillion, according to CoinMarketCap data.

From 2018 onwards, stablecoins have increasingly been used in international trade and as a way to avoid capital controls, says Joseph Edwards, head of financial strategy at crypto firm Solrise. The stablecoin Tether in particular is used for trade in and around China and South America, he said.

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