Cryptocurrencies are a powerful financial tool, known for their privacy, digital utility and instant processing. But they are also notoriously volatile. Stablecoins solve that problem.
Would you want to carry $20 in your wallet if it went from $17 to $25 to $18 throughout the day? When you bring $20 to a night out bowling, you are prepared to spend it. When you look to make a purchase, there is a clear expectation of how much your cash is worth before you buy anything. In the world of crypto, the market needs a currency that can offer that same stability. Stablecoins accomplish that by tying themselves to fiat currencies and other stable assets.
The main advantage of fiat currencies is their price stability, so by tying a digital coin to fiat, you can get the advantages of both crypto and fiat currency. Stablecoins can also be tied to less volatile commodities like gold.