Stablecoins: crypto without the rollercoaster

Stablecoins aim to counteract cryptocurrencies’ volatility. But if central banks get in on the act, they could finish off cryptocurrencies altogether.

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The Winklevoss twins' Gemini dollar has been another unstable stablecoin
(Image credit: 2017 Astrid Stawiarz)

Bitcoin and all the other cryptocurrencies have been a boon for speculators. But bitcoin was intended to be a currency: both a store of value and a means of exchange. Whether it proved to be a store of value depends on which stage of the bubble and bust you may have bought it. But there can be little doubt that, as a means of exchange, it has proved useless. It was so volatile it was practically impossible to gauge what you could buy with it. For instance, in January 2017 BTC0.002 would have cost around $1.80 and got you a cup of coffee. By September, the sum would be worth $7; by mid-November around $15; and by mid December $35. Now we're back to around $8.

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Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. 

As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.