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Top 3 Safe Stablecoins That are Good Alternatives to Terra UST

Top 3 Safe Stablecoins That are Good Alternatives to Terra UST

Last updated 30th Nov 2022
Disclosure
  • Terra's UST crashed, leading to billions in losses.
  • We highlight the best and safest stablecoins to buy.

The collapse of Terra USD has led to many questions in the cryptocurrency industry. Among the several questions has been on whether UST will recover. In a previous article, I made the case that the coin will indeed recover as the price stability measures kick in.

Another question has been on the best alternative to UST. While I expect that UST will bounce back, the crash has raised to serious concerns about algorithmic stablecoins like USDD and Neutrino. So, here are the best stablecoins to buy.

Tether (USDT)

Tether is one of the oldest stablecoins around. It was launched by Bitfinex, an old cryptocurrency exchange that is known for its hack. Unlike UST, Tether is a centralized stablecoin that is managed by its foundation. This foundation is mandated to ensure that each USDT in existence is backed by $1.

In the past, Tether has faced criticism because of its bonds and commercial paper holdings. The developers argue that investing these funds makes it possible for them to generate income.

According to its website, the total USDT in Tether is worth more than $82 billion while the total EURT in Tether stands at over 237 million euros. As shown below, over 83% of all its holdings are in cash and other short-term deposits and commercial paper. The remainder are in secured loans and other investments.

Tether is audited by Moore Global.

Learn how to buy Tether.

USD Coin

USD Coin is another alternative to Tether USD is USD Coin, which was started by Circle. It is managed by both Circle and Coinbase. The coin is similar to Tether in that it seeks stability by being backed by the US dollar.

Unlike Tether, its reserves are completely backed by the US dollar. This means that each USDC is backed by $1. However, it is possible to earn interest on the coin using the Circle Yield feature. At the time of writing, USD Coin has a market cap of $49 billion. It is audited by Grant Thornton.

Recently, Blackrock and Fidelity announced that they had invested $400 million in Circle. Blackrock is looking for ways to use USDC.

Binance USD

The other viable alternative to Terra USD is Binance USD. It is a stablecoin that was created by both Binance and Paxos. Like USD Coin, it is a centralized stablecoin that is completely backed by the US dollar.

Its reserves are all backed completely by US dollar. The funds are stored in FDIC banks and is audited by a leading auditor. It is also regulated by the New York State Department of Financial Services. These features make it a good alternative to Terra UST.

Crispus Nyaga

Crispus Nyaga

Crispus is a financial analyst with over 9 years in the industry. He covers cryptocurrencies, forex, equities, and commodities for some of the leading brands. He is also a passionate trader who operates his family account. Crispus lives in Nairobi with his wife and son.