Tag: How does stablecoin make money?

Centralised stablecoins, like USDT (Tether) and USDC, make money through lending and investing , in a manner similar to traditional banks. They do these through fractional reserve banking, where only a fraction of deposits are backed by physical cash on hand that can be withdrawn by investors.

While predictable cryptocurrency may sound like an oxymoron, stablecoins – like their name suggests – were designed to counter crypto’s hallmark volatility and provide a convenient way for crypto traders to preserve their fiat value without having to cash out of the market and to allow users to pay for everyday goods …