Stablecoins in 2024 account for around a tenth of the whole cryptocurrency market. The stablecoin market contracted during the 2022 cryptocurrency crash, but today, trading volumes and overall market capitalization have almost reached the levels before the crash. Visa, PayPal, and other global businesses have adopted stablecoins as an alternative method of settlement and payment, and this has continued in 2024.
Advantages of stablecoins
Stablecoins run on blockchains that are active around the clock, so you can trade and exchange them at all times with almost instant settlement. Stablecoins in 2024 are worth holding as well. Most of them are interoperable, and can run on numerous blockchains.
They are becoming more and more popular because they have the best features of cryptocurrencies combined with the price stability of fiat currency. The biggest stablecoin group is fiat-collateralized stablecoins, which are backed by fiat currencies, usually in a 1:1 ratio. There are also crypto-collateralized stablecoins, commodity-collateralized stablecoins, and algorithmic stablecoins.
Best stablecoins in 2024 for business
Tether and USD Coin, the two largest stablecoins by market cap, are the best for B2B companies. They are both fiat-collateralized, backed by reserves of the US dollar. Unlike most other stablecoins, they don’t have a significant history of depegging, meaning loss of the peg to the dollar. It has happened, but only for a brief period and with a small decline. What’s more, any depegging has been quickly resolved.
You can’t say the same for TerraUSD, which lost its peg in 2022 and led to the collapse of Terra Luna, wiping out billions from the crypto market. While stablecoins in 2024 and beyond don’t face such a huge risk, the possibility should always be considered. After all, what must a stablecoin in 2024 be, if not stable!
Stablecoins for retail investors
As a retail investor, you might want to hold your assets. You can earn interest on your stablecoins in 2024 on platforms like Coinbase. It might be possible to generate a yield on stablecoins in 2024 by lending them out, and the yield is usually higher than traditional savings accounts. You can use USD Coin to invest in a business on a platform like AngelList.
Maximizing returns
Cogito Finance recently announced the launch of TFUND, a product that simplifies access to US Treasuries for crypto-native investors and institutions on the blockchain. TFUND offers several advantages for holders of stablecoins in 2024 compared to traditional investment options. Crypto-native investors can bypass the lengthy procedures typically required for brokerage accounts, whilst maximizing returns by safely allocating idle stablecoins in a low-risk environment.
TFUND offers a unique solution not only for individuals holding stablecoins in 2024, but also web3 companies and institutions seeking to hedge against inflation. They can securely invest in low-risk, stable assets like US Treasuries. This protects their holdings from inflation. TFUND eliminates the challenges associated with accessing traditional banking systems, particularly beneficial in crypto-unfriendly jurisdictions. Returns tied to current Federal Reserve rates are possible.
Safety is a priority
Cogito prioritizes investor safety and clear visibility into the fund. Assets and stablecoins in 2024 are held securely off-chain, minimizing risks associated with smart contracts. Added security comes from KYC procedures, with tokens transferable only to verified addresses. Chainlink's Proof of Reserves technology provides daily insights into the fund's net asset value.
Cloris Chen, CEO of Cogito Finance, commented:
The entry of major players like BlackRock into securities tokenization is a powerful validation of our initial concept for a tokenized US Treasury fund. This endorsement strengthens our belief that tokenizing traditional securities on public blockchains represents the inevitable next step in the evolution of financial markets.
Stablecoins in 2024 and beyond
Cogito Finance, whose team features former HSBC and Meta executives, envisions a future with additional on-chain investment opportunities beyond US Treasuries. It focuses on instruments such as green bonds, catering to environmentally conscious investors while achieving a decent return on investment. The company is also committed to AI-powered portfolio management opportunities capitalizing on the sector's growth potential.
Cogito's long-term vision is to bridge the gap between traditional finance and the blockchain ecosystem. TFUND is the initial step towards offering a broader range of diversified, secure investment opportunities for the crypto community. This empowers institutions and investors to participate in the future of finance.
Stablecoins in 2024 and beyond are also an excellent option for cross-border transactions, because traditional financial infrastructure can be disconnected, rendering payments and settlements costly, slow, and complicated.
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