![images.jpeg73.jpg](https://i.imgur.com/ttRyWme.jpg)
[Source](https://zipmex.com/learn/the-importance-of-stablecoins-and-their-future/)

Stable coins, everyone's favourite go to when markets begin crashing. Digital assets pegged to a fiat currency the most common being the United States Dollar. But what ensures the tokens remained pegged and not collapse or blow out? Their stability is what ensures market confidence in them. 

Stable coins are also a major focus of current world banks and research is underway to develop central bank digital currencies. Although much is being debated if this should be the forward approach or if the sector should leave it to the private sector as there are already a number of Stable Coins successfully in circulation. 

Recently Stable coins have come under scrutiny by investors and public pressure as for an open and transparent sector, Stable coins weren't exactly open and transparent on how they were achieving their peg and what assets ensured their success. 

We already knew that Stable coins require complex algorithms that buy and sell an asset to ensure the token remains pegged. But what really behind the curtain? 

Due to public pressure a number of Stable Coins have opened up about what it is that really keeps them pegged. Let's take a look at what we know so far and which Stable coins are leading. 

## **USDC**
![1626908797743.jpg](https://i.imgur.com/G14cbbq.jpg)
One of the most popular Stable coins on the market is USDC which is growing across multiple block chains. 

The company behind the Stable coin is called [CIRCLE](https://www.circle.com/en/usdc) and at current there is just over $US26 Billion USDC in circulation. 

The company hasn't specifically released what exact assets it holds but they have announced what sectors are proving their token price up. 

13% of their stocks consist of Certificates of deposit or CDs, 
12% is held in US treasuries, 9% commercial papers, 61% cash and the rest in bonds. 

You can read abit more about it [Here](https://www.coindesk.com/circle-reveals-assets-backing-usdc-stablecoin) and how the token is ranked in a strong position to meet its financial obligations making it a safe Stable coin. 

## **Tether**
![images2.png](https://i.imgur.com/tsbPCtz.png)
[Source](https://wafmart.com/product/usdt/)
Tether is another popular Stable coin pegged to the United States Dollar but recently saw issues emerge with a [Law suite](https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settlement-with-new-york-attorney-general.html) brought on by New York's attorney generals office alleging Tether used $US700 Million of cash reserves to cover a $US850 million loss of investor funds. 

The largest used stable coin on the market was slapped with an $US18.5 million dollar fine. 

Close to 76% of its backing are in cash, loans secure just over 12%, close to 10% on bonds and precious metals, a small amount of 1.6% on other investments. 

Due to the court case Tether has had to open up about its investments and have produced a really great financial report on holdings which can be found on their website [Here](https://wallet.tether.to/transparency?__cf_chl_jschl_tk__=pmd_7dd704fe13d533c53ebf6a34f62551e891b6c96a-1626910346-0-gqNtZGzNAeKjcnBszQii)

There is also further reading on the court case findings and settlement as well as tethers financial break down [Here](https://www.coindesk.com/tether-first-reserve-composition-report-usdt)

## **BUSD**
![images3.png](https://i.imgur.com/A8CRqK1.png)
[Source](https://www.binance.com/en/amp/blog/376335367507857408/Binance-Partners-with-Paxos-to-Launch-USDBacked-Stablecoin-BUSD)

Binance entered the Stable coin market with the development of BUSD in partnership with Paxo the announcement by Binance can be found [Here](https://www.binance.com/en/amp/blog/376335367507857408/Binance-Partners-with-Paxos-to-Launch-USDBacked-Stablecoin-BUSD) as well as information around the token and it's implementation on binance. 

BUSD is currently held up with a 96% backing in cash and only 4% in US treasury bills. BUSD is the third largest Stable coin on the market with the above two tokens Tether and USDC taking first and second place. 

You can read more about BUSD and Paxo [Here](https://www.coindesk.com/paxos-reveals-assets-backing-stablecoins-pax-busd) 

I found the below graph created by paxos which provided a summary of assets backing the top three Stable coins really helpful in determining which token I believe had a better spread and more secure. 

You can read a more in-depth analysis on the paxo blog and the source of the graph [Here](https://www.paxos.com/a-regulated-stablecoin-means-having-a-regulator/)

![1626911179213.jpg](https://i.imgur.com/UqnXlxz.jpg)

## **Will there be a CBDC?**

My opinion on the subject is that I don't believe CBDC will occur, there is too much movement in the private sector and regulators are focusing in on stable coins ensuring their success.

I think the future in Stable coins is already here and regulators will just focus on supporting and ensuring regulatory compliance of current stable coins rather than developing their own. 

Either way this is a great step in the right direction forward and enables further transparency and safety to investors knowing what is backing their investment. 

What are your thoughts? Do you feel more confident in the market knowing what's backing Stable coins?





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