Everything You Need To Know About Stablecoins vs Fiat CurrencyPublished October 15, 2022 by Shane
Gain a deeper understanding of Stablecoins and fiat currency, plus the benefits they offer. Understand the payment options available and choose the best one for your needs.
Fiat currency has been the main currency option for as long as history has been recorded. That all changed with the arrival of cryptocurrency and stablecoins. With stablecoins on the rise, there is a debate on which is best for online casino players.
As new coins make their way onto the market and start to grow, it can be tough to choose which form of payment is best. To help you find out more, we’re digging into what makes each currency a good option for online gambling and what you need to know.
Different Currency Options
Below we’ll look at fiat currency and stablecoins options and which is the best for online gaming.
Stablecoins are cryptocurrencies that limit the volatility investors can face when making use of crypto. These coins are generally linked to other assets with a more stable value. In some cases, they can also get backing from an algorithm.
- Tether – This stablecoin gets its name from having its value ‘tethered’ to the value of the USD. It is one of the most stable coins backed by traditional currency and gold.
- USD Coin – The USD Coin gets its backing from Coinbase, the world’s largest Bitcoin broker.
- Binance USD – The Binance crypto exchange has released its own currency known as Binance USD, which is set at 1:1 to the US Dollar.
Stablecoins have been slowly rising in popularity since 2017 and are one of the more stable forms of cryptocurrency. With the success of crypto coins, reserve banks have been influenced to investigate their own crypto coins. The majority of stablecoins are backed by dollar reserves. For instance, the Chinese Yuan keeps a reserve of currency as collateral.
Fiat Currency is not asset-backed and is issued by national governments. The value of the fiat currency is determined by the central bank and the country’s authority. Central banks can regulate the number of banknotes in circulation or choose to withdraw them from use.
While fiat currencies are accepted universally, they are subject to inflation, and there is the risk of losing value quickly. It’s also possible for a fiat currency to go out of circulation entirely.
What happens when a currency goes out of circulation? It essentially turns your dollars into pieces of paper with no value.
Pros and Cons
No matter which you choose to use, there are bound to be benefits and disadvantages that will affect your gameplay.
Stablecoins have a range of unique pros and cons. The advantage is that it is borderless, ensuring it retains the power of cryptocurrency without being required to move its physical borders.
It also comes with quicker transactional speed as any blockchain transactions are known to be speedier than the traditional process. And let’s not forget that there are no requirements for third-party authentication, which leads to the benefit of fee-free transactions.
Another reason users love Stablecoins is that it is entirely transparent, with all transactions recorded in a public ledger on the blockchain.
Some disadvantages include cryptocurrency's constant scrutiny and the requirement for third-party audits. Stablecoins are expected to go through audits which go against decentralisation.
As for fiat currency, there are just as many pros and cons, which include the fact that fiat currency is available and acceptable almost everywhere. Another huge pro is that many banking options are available to use with fiat currency. E-wallets, bank cards, and more can be used to make deposits and withdrawals at online casinos, while getting your hands on stablecoins can be complicated.
For those who want to stay anonymous, fiat currency may not be the best option. You are also tied to moving transactions through the banking system, which means slower withdrawal times and extra fees.
What is the Verdict?
Stablecoins are a great investment option outside the stock market and other investment opportunities. The one thing you need to keep in mind is that stablecoins are asset-backed, and their price rarely changes. On top of that, stablecoins need to be exchanged for fiat currency to be spent outside the blockchain.
Each currently has its own benefits and disadvantages, ultimately leading to choosing the one that is most convenient for you.
Fiat currency is quick and convenient when spending funds offline. However, when it comes to online casino gameplay, there are more benefits when using Stablecoins. This includes conversion rates and transactional speeds. It also adds that extra layer of security with all transactions documented and available to the public.
Choose the option that best suits your pocket and gameplay style to make the most of your funds and playing opportunities.
What All Crypto Investors Want to Know
As we delved deeper into this fascinating topic, several questions were constantly part of the conversation. To help you better understand the topic we thought it would help to answer them for you here:
- Are transactions via cryptocurrency taxed? Stablecoins/cryptocurrency is viewed as property, and general tax principles apply. Virtual currency transactions can be taxed, depending on where you live.
- How many different cryptocurrencies are there? There’s only a short list of well-known cryptocurrencies trusted by many, but there are estimated to be over 900 coins on the market.
- Which currency option is best? It depends on the availability of the currency at your chosen online casino and the current economic value. As with any other casino-related issues, the best option for you is the one that provides the most stability and convenience.
- What are the most popular stablecoins currently on the market? While hundreds of cryptocurrencies are available on the market, the top stablecoins include USD Coins, Binance USD and Tether.
- What are the benefits of using stablecoins for online gameplay? Stablecoins are more stable as per the name and have a 1:1 ratio value against fiat currency. You can also enjoy quicker payouts, safer transactions, and low fees.