Top 6 Best Stablecoins to Buy in Australia for 2021
Stablecoins are a unique type of cryptocurrency that has their value backed by an external reserve asset, such as the U.S. dollar or gold. Having.
Stablecoins are a unique type of cryptocurrency that has their value backed by an external reserve asset, such as the U.S. dollar or gold. Having its value pegged to an outside asset means that it retains a relatively stable value, hence the term, while also providing the benefits of being a digital currency.
Now, which stablecoin should you buy in Australia for 2021? With all things considered, stablecoins that have gained traction and have inner potential include USDT, USDC, DAI, UST, PAXG, and EOSDT.
But don’t take our word for it! Go ahead and continue reading this article to find out how we analysed and chosen the best stablecoins to buy based on market capitalisation, and evaluated them based on their security, stability, and potential.
The top stablecoins by market capitalisation are all fiat-collateralised stablecoins. However, we want to provide a healthy mix of all three variants of stablecoins, so we snuck in a few stablecoins that are actually quite good. However, if you want to know the top 20 stablecoins by market cap, head over to Coin Codex.
1. Tether (USDT)
Tether (USDT) is the most popular stablecoin. Having been created in 2015, it is the first stable cryptocurrency of its kind. As of March 2021, Tether has reached a market cap of 34.76 billion US dollars.
In terms of stability, Tether has maintained a near-constant 1:1 ratio with the US dollar, with a maximum range of 12 pips over the past 52 weeks (1 pip equals to 0.0001 of a dollar value). It is no surprise as Tether is hard-pegged to the US dollar.
Although Tether is a cryptocurrency, it is by no means a decentralized one like Bitcoin or Ether. Tether is minted by a private company, Tether Limited, and its total supply is determined by the policy of the company — thus far 1 USDT is minted for every 1 USD exchanged.
Tether was hit with a lawsuit in the past couple of years due to falsely claiming that every single Tether is backed by a US dollar that is readily redeemable in some bank accounts. The actual amount is somewhere around 70%, while the rest is loaned in a bond.
Still, the stablecoin retained its value and is likely to remain the most popular stablecoin in the US market and the global crypto exchange ecosystem.
Looking to buy? Learn how you can buy USDT in Australia.
2. USD Coin (USDC)
Challenging Tether is USD Coin, first minted in 2018 by Centre, with the noble promise of keeping fully reserved assets that are constantly monitored and with frequent and open audits — something that Tether failed to do in its younger years. To see for yourself, click here to download their reserve account report for January 2021.
USD Coin runs on the Ethereum and Algorand blockchain; it’s probably the first of its kind to run on two blockchains for better scalability and security.
This ensures transaction fees are always cheaper than regular bank transfers, and much faster. However, being a fiat-collateralised stablecoin issuer based in the United States, Centre falls under the scrutiny of the US Federal Law, to ensure that they follow the new Stablecoin Regulations.
With a market cap of 9.47 billion US dollars, USD Coin market capitalisation surpassed the 1 billion US dollar mark in 2020, making it one of the fastest-growing stablecoins.
We included the USD Coin in the top 6 best stablecoins to buy in Australia this year since it has gained considerable growth in both popularity and trust, offering a bright future for its commercial use, taking or even potentially overshadowing Tether’s market share in the middle or long term.
Invest in USD Coin: Click here to buy USDC in Australia!
3. Dai (DAI)
As you can see, while fiat-collateralised stablecoins are straightforward and easy to understand, issuers are placed under scrutiny by regulators because they deal directly with real-world fiat currency — in other words, the property of the country.
Dai attempts to decouple from the fiat monetary system by assuming a soft peg to the US dollar (or other currencies). Technically speaking, Dai is pegged to the value of Ether, at a ratio of 1 US dollar worth of Dai for every $1.50 worth of Ether collateralised (at the time of writing, it is 0.0832 ETH for every 1 DAI).
Since Dai is not hard-pegged to the US dollar, it’s not necessary to purchase either Dai or Ether with US dollars. For as long as you have an amount of ETH to be stored in a smart contract, you can mint Dai and introduce it into the circulation.
We really like Dai as a stablecoin because the MakerDAO smart contracts for Dai have been successful at keeping the price stable, even when ETH’s price crashed in 2017. With a total market cap of $2.89 billion US, Dai is the most adopted crypto-backed stablecoin, and it has enticed both holders who lock them for interest profit, and retail traders who use Dai instead of fiat currency to enter and exit a trade.
Interested in Dai? Click here to invest in DAI in Australia!
4. TerraUSD (UST)
Although algorithmic stablecoins are new technologies, Terra has had a surprising growth in market cap, surpassing $1.26 billion US dollars by 2021 and ranking the 5th most popular stablecoins by market cap.
However, market cap isn’t always a popularity contest. Unless it is Tether, there is a small chance that retail traders are using Terra solely to operate in the crypto exchange space, and there is an even smaller chance that Terra can be used to buy goods and services, at least for now.
Still, the great thing about Terra is that it has an appreciable system that accommodates cross-border transactions with native currencies, not just the US dollar.
This means Terra is not just one stablecoin, but a family of stablecoins, each pegged to one of the major currencies in the world, in addition to the Korean Won and Mongolian Tugrik — both TerraKRW and TerraMNT are two highly successful test economies that have adopted Terra to its highest potential.
It is easy to swap between Terra of various world currencies — all this with the magic of computer science, to bypass all the intermediary forex traders who could manipulate prices.
Had Terra been a couple more years older and had proven itself as an effective cross-border foreign exchange tool, Terra would certainly make it to the top 6 best stablecoins to buy in Australia.
5. Paxos Gold (PAXG)
Bitcoin may be the new digital gold, but this does not mean ignoring the potential for elemental gold to play an important role in the blockchain investors’ economy.
Digitizing gold is nothing new, of course, and if a system to represent an asset digitally has already existed, then a powerful blockchain to back up its security should already be utilised for more traditional investors who love a touch of gold.
This is where Paxos Gold comes in as the best gold-collateralised crypto stablecoin in existence, with a market cap of 147 million US dollars. Paxos was founded in 2012 with the goal of decentralising finance — even before Ethereum was launched. Now backed with Etherium’s expansive network, PAXG is increasingly efficient, convenient, and powerful.
Paxos Gold boasts its zero custody fee over the allocated physical gold, and that investors can instantly redeem physical gold at any time. PAXG is one of our top picks for the best stablecoins to buy in Australia because it attracts all kinds of investors — those with deep pockets can be assured that Paxos Gold is regulated by the New York State Department of Financial Services; those who simply want the taste of it can enjoy a lower barrier of entry of around A$25 to purchase a minimum 0.01 troy ounce gold.
1 PAXG is hard pegged to 1 troy ounce of a gold bar (approx. 31 grams), following the London Good Delivery standard.
Buy Paxos Gold: Click here to invest in PAXG in Australia!
While many consider EOSDT as a crypto-collateralised stablecoin, what keeps it afloat at $1 US : 1 EOSDT is a combination of AI-powered arbitrage trader and community incentives to trade on the price differences. With the current market cap at $ 2.63M
While the EOSDT Equilibrium framework puts a large amount of trust to the community for being rational agents to influence the supply of EOSDT, the framework also makes use of the over-collateralised reserve to safeguard against violent fluctuations in case of economic shocks.
In such cases, the framework prevents borrowers of EOSDT from suffering large losses while EOSDT is pegged to the US dollar. This is great for investors as they can feel reassured that they can pay back the EOSDT and reclaim their crypto assets.
EOSDT takes advantage of Bitcoin’s huge network security, while also running on the EOS blockchain. Borrowers can generate EOSDT using EOS coin or Bitcoin.
Check the latest stablecoin rates Australia: Click here to visit our crypto live rates.
There are so many stablecoins to choose from, and chances are, many more will appear in the future. Since stablecoins aren’t as much of an investment as other crypto coins, your only concern is the issuer’s solvency, market capitalisation, and adoption as measurements of the quality of a stablecoin.
You may want to hold a particular stablecoin for specific purposes. That coin may not be on this list — that’s completely fine! Hopefully, this list has been insightful in giving you insight into the different stablecoins that are available out there.
And to that end, Easy Crypto is ready to help your digital investment needs. With competitive rates, the flexibility of swapping directly between your digital assets, portfolio tracking, and more.
Get started: Click here to buy stablecoins in Australia.
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Disclaimer: This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated December 6, 2021