What is a Stablecoin?

Feb 1, 2024

Feb 1, 2024

In the ever-changing world of digital assets, stablecoins act as a steadying influence, guiding the market toward more widespread adoption. So, what are these game-changing assets? In this blog, we'll talk about the definition, examples, the importance, and explore how Mural's platform leverages this technology.

So, What is a Stablecoin?

Stablecoins are digital currencies backed by reserve assets like the US dollar or gold.  For instance, USDC stablecoin is a digital dollar backed by the equivalent value of US dollar-denominated assets held as reserves.  Similarly, EURC is a digital euro backed by the equivalent in euros.

They provide a digital counterpart to traditional currencies while maintaining the benefits of blockchain technology. They achieve this stability through mechanisms overseen by smart contracts on a blockchain, allowing for transparent verification of reserves. Below is a graph showing the amount of USDC in circulation versus the amount held in reserves.

A graph showing 25 billion in circulation and 25.6 billion in reserves.

Common stablecoins:

From major financial institutions to tech companies, a variety of organizations have issued stablecoins. Each with their own unique features but all aiming to provide inclusion, stability, and innovation to traditional payment systems.

  • USDC (Circle): A fully-backed digital dollar issued by regulated financial institutions.

  • USDT (Tether): The first and most used backed 100% by Tether’s reserves.

  • EURC (Circle): A token pegged to the Euro, offering a digital dollar in the European economy.

  • PYUSD (PayPal): PayPal's venture into digital assets, bringing the trusted name into digital currency.

What is the importance of stablecoins?

Now that we know what is a stablecoin, we can learn why it is important. Digital dollars like USDC have made a big difference in connecting traditional money with the online world. They offer a stable and trustworthy medium for global commerce and savings. They foster a conducive environment for businesses and individuals alike to engage in financial activities with greater confidence.  Platforms like Mural are leveraging this stability to facilitate seamless, real-time global transactions.

In contrast, traditional systems often create friction due to slow processing times, high fees, and regulatory hurdles. This is where companies like PayPal and Circle step in, aiming to alleviate the difficulties associated with cross-border transactions. Their ambition is to unveil faster and more economical alternatives to conventional banking systems, thus accelerating the pace towards a more digitized global economy.

The real-world application

The future looks promising for stablecoins with their increasing adoption across various sectors. Here at Mural, we use the power of stablecoins to provide instant, global payouts with no transfer fees. Showcasing the real-world utility and the potential of stablecoins in making fast, scalable, and compliant transactions.

  • Vendor Payments: Use stablecoins to pay vendors or contractors, especially those overseas, to save on transaction fees and enjoy faster payments.

  • Payroll: Level up your payroll by paying contractors and employees instantly with reduced transaction fees, ensuring everyone gets paid out on time with no delays.

  • Invoice Payments: Pay invoices using stablecoins to enjoy the benefits of real-time traceability and reduced transaction costs.

Get started today

With Mural's platform, businesses can move beyond the traditional financial hurdles. Learn how you can leverage stablecoins like USDC for payroll management, bill payments, invoicing, and seamless integration with current accounting software. Book a demo today to learn more.

In the ever-changing world of digital assets, stablecoins act as a steadying influence, guiding the market toward more widespread adoption. So, what are these game-changing assets? In this blog, we'll talk about the definition, examples, the importance, and explore how Mural's platform leverages this technology.

So, What is a Stablecoin?

Stablecoins are digital currencies backed by reserve assets like the US dollar or gold.  For instance, USDC stablecoin is a digital dollar backed by the equivalent value of US dollar-denominated assets held as reserves.  Similarly, EURC is a digital euro backed by the equivalent in euros.

They provide a digital counterpart to traditional currencies while maintaining the benefits of blockchain technology. They achieve this stability through mechanisms overseen by smart contracts on a blockchain, allowing for transparent verification of reserves. Below is a graph showing the amount of USDC in circulation versus the amount held in reserves.

A graph showing 25 billion in circulation and 25.6 billion in reserves.

Common stablecoins:

From major financial institutions to tech companies, a variety of organizations have issued stablecoins. Each with their own unique features but all aiming to provide inclusion, stability, and innovation to traditional payment systems.

  • USDC (Circle): A fully-backed digital dollar issued by regulated financial institutions.

  • USDT (Tether): The first and most used backed 100% by Tether’s reserves.

  • EURC (Circle): A token pegged to the Euro, offering a digital dollar in the European economy.

  • PYUSD (PayPal): PayPal's venture into digital assets, bringing the trusted name into digital currency.

What is the importance of stablecoins?

Now that we know what is a stablecoin, we can learn why it is important. Digital dollars like USDC have made a big difference in connecting traditional money with the online world. They offer a stable and trustworthy medium for global commerce and savings. They foster a conducive environment for businesses and individuals alike to engage in financial activities with greater confidence.  Platforms like Mural are leveraging this stability to facilitate seamless, real-time global transactions.

In contrast, traditional systems often create friction due to slow processing times, high fees, and regulatory hurdles. This is where companies like PayPal and Circle step in, aiming to alleviate the difficulties associated with cross-border transactions. Their ambition is to unveil faster and more economical alternatives to conventional banking systems, thus accelerating the pace towards a more digitized global economy.

The real-world application

The future looks promising for stablecoins with their increasing adoption across various sectors. Here at Mural, we use the power of stablecoins to provide instant, global payouts with no transfer fees. Showcasing the real-world utility and the potential of stablecoins in making fast, scalable, and compliant transactions.

  • Vendor Payments: Use stablecoins to pay vendors or contractors, especially those overseas, to save on transaction fees and enjoy faster payments.

  • Payroll: Level up your payroll by paying contractors and employees instantly with reduced transaction fees, ensuring everyone gets paid out on time with no delays.

  • Invoice Payments: Pay invoices using stablecoins to enjoy the benefits of real-time traceability and reduced transaction costs.

Get started today

With Mural's platform, businesses can move beyond the traditional financial hurdles. Learn how you can leverage stablecoins like USDC for payroll management, bill payments, invoicing, and seamless integration with current accounting software. Book a demo today to learn more.