There are many different virtual currencies all over the world, including the so-called stablecoins. These virtual currencies work as other digital assets, but they have a very important difference, their price is more stable than the rest of the cryptos in the market.

Stablecoins became popular with Tether (USDT), currently the largest stablecoin with a market capitalization close to $1.8 billion dollars. It helped investors to find a cryptocurrency to hedge against Bitcoin and virtual currency price volatility.

Nevertheless, Tether has been involved in many controversies and issues that undermined the trust that investors and crypto users had in this stablecoins. Although the company behind Tether says that there is $1 USD dollar per each USDT issued, users are currently buying and selling it just a few cents under this price.

It is important to mention that Bloomberg wrote an article titled Where to Invest $1 Million Right Now. One of the experts quoted said that Gold could be a good performing asset for the next ten years.

According to Darrin Woo, director of Woo Hon Fai Group, said that stablecoins and gold could work together and provide innovation for transacting this precious metal.

About it, he said:

“Because of my family background – my grandfather founded Lee Cheong Gold Dealers in Hong Kong in 1950 – I believe in the physicality of gold. I would buy a million dollars’ worth of bullion bars and stuff them under my mattress. Gold has underperformed the S&P 500 index for the past five years. In the next 10 years, gold is one of the best contrarian plays. I say buy when no one else does.”

Woo said that he has recently invested in a cryptocurrency called G-Coin. G-Coin is a stablecoin that is associated with the price of gold, allowing the investor to be sure that its funds will be secured against inflation. Moreover, he explains that users will be able to benefit from price appreciation in the sector in the future.

Nevertheless, they will experience the volatility that the sector is used to handle.

Nowadays, millennials are not interested in buying and purchasing stocks, Woo says. Indeed most of them do not even have brokerage accounts or they are not able to afford real estate. This is why they might be looking for a sore of value that is also convenient to hold. Blockchain technology is a suitable technology for all of them.

It is also important to always have a diversified portfolio in the virtual currency market. This is why unlike Bitcoin (BTC) and Ether (ETH) the stablecoin backed by gold has an intrinsic value that reduces volatility. As G-Coin was created using blockchain technology, it is also possible to track. Additionally, the coin is backed by gold produced in accordance with the World Gold Council and Responsible Jewellery Council Standards.

During the last months, several new stablecoins were released to the market, including the Gemini USD (GUSD), and the USD Coin (USDC), backed by Circle. Nonetheless, there was no coin backed by gold until now.

Although Bitcoin can be stable in the long term, stablecoins could find a place in the market and grow as well.

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