Could Stablecoins Help Entrepreneurs Grow Their Businesses?

Bitcoin and other cryptocurrencies would rather not think about 2018. Notably, the year saw the digital currencies shave off huge chunks of their value. For instance, bitcoin lost over 80% of its peak value at the end of 2017. However, the decline of the traditional digital currencies gave way to the gradual prominence of another breed called stablecoins.

In particular, digital currencies enjoy a decentralised nature where no one entity has power over their minting and supply. Further, the cryptocurrencies exist on heavily cryptographic platforms where interactions are peer-to-peer (P2P). Interestingly, stablecoins are an amalgamation of both digital currencies and traditional currency like the dollar. Notably, they use fiat currency as a value floor.

Stablecoins survived the crypto-onslaught because they are stable due to their peg to fiat currency. Interestingly, the presence of stablecoins in the business sector could bring new possibilities for entrepreneurs to grow their businesses.

Stability

There are stablecoins that use a basket of currencies as the value floor. For instance, a stablecoin could have ten fiat currencies as its peg. As such, if one of the currencies were to devalue significantly, the other currencies will hedge the stablecoin against substantial loss in value.

Interestingly, currency stability is one of the biggest challenges for entrepreneurs in the market. Oftentimes, people lose a substantial amount of capital they raise for business to currency volatility. However, stablecoins will ensure that entrepreneurs keep as much value as they can from their capital for growth investment.

Raising capital

Clearly, raising capital today is not as daunting as it was, say twenty years ago. This is because of venture capitals that tipped the scales slightly towards entrepreneurs. However, many of the VCs are huge firms with a bloated bureaucracy that erected hurdles for entrepreneurs. Notably, it is not uncommon to find VCs today focusing more on perceived value than the growth potential of ideas.

On the contrary, stablecoins avail the opportunity for entrepreneurs to offer initial coin offerings (ICOs) to raise capital. Apart from enabling investors to participate directly in helping an idea grow, ICO provides much-needed capital. As such, stablecoins are giving entrepreneurs the opportunity of a lifetime to circumnavigate systemic hurdles for growth.

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