Over the past few years, stablecoins have gained momentum as an alternative to traditional cryptocurrencies. Unlike those volatile tokens, which are challenging to value beyond their near-term demand, most of the top stablecoins are pegged to the U.S. dollar.
It might seem counterintuitive to invest in a token that tries to keep its value at $1.00. Still, these coins can be held without a bank account, used for faster, cheaper cross-border money transfers, and staked on centralized finance (CeFi) exchanges and decentralized finance (DeFi) pools to earn yields much higher than those of traditional savings accounts.
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One of the best stablecoins to buy is Tether (USDT +0.00%), launched in 2014 and now the world's top stablecoin with a market cap of $185 billion. Tether Limited, a subsidiary of Hong Kong-based iFinex (which also owns the Bitfinex cryptocurrency exchange), is the only company that mints Tether tokens. It uses a mix of cash, commercial paper, and other assets to maintain its peg to the U.S. dollar. It doesn't fully open its books for complete audits, but it assures its investors it has sufficient underlying reserves through third-party attestations.
Tether's scale gives it a significant advantage against smaller stablecoins, and it's deeply integrated into other popular blockchains. Therefore, if you want to hold some U.S. dollars -- but don't want to open a traditional bank account -- it might be a good idea to buy some Tether right now.
