The pros and cons of stablecoins

The advantages of stablecoins include low fees and faster transacting. Due to the elimination of central intermediaries or third parties, stablecoins can be bought, sold, and transferred peer-to-peer at a much cheaper and faster rate than traditional transfers of funds. More often than not, transactions through credit cards or bank transfers usually charge decent fees instantly, whereas transacting with stablecoins would usually incur a minimal fee and be a lot faster due to being less verifications. Additionally, these cheap and fast transactions are borderless. Just like other cryptocurrencies, stablecoins can be transacted via online means with no regards for borders, bank or central intermediaries. These transactions are also done on a publicly available blockchain, meaning all users can monitor all transactions. This does not occur with traditional payments. 

A disadvantage of stablecoins is the sense of centralisation that is required for them to operate. This is because a majority of stablecoins pertain to an individual entity (organisation). This means that although stablecoins are decentralised on their own, a single entity must control its issuance and minted supply. This goes against the very nature of blockchain technology and cryptocurrencies as it introduces a central intermediary, similarly to banks. However, it must be noted that not all stablecoins are centralised (such as DAI). Moreover, due to centralisation as they’re usually pegged to a fiat currency (such as the USD), their value depends on the current conditions of the global markets and are subject to inflation.